In a recent article entitled MICROSOFT HAS MADE 5X MORE MONEY FROM ANDROID THAN THEY HAVE FROM WINDOWS PHONE 7 (we added the caps for dramatic effect, FYI…), Mobile Crunch reported that the [aspiring] smartphone giant pockets loads more revenue thanks to the Google OS than from it’s own in-house effort, Windows Phone 7.
That’s despite never having released a single Android handset.
It seems back in April 2010 Microsoft threatened a can of legal whoop*** on handset manufacturer HTC, claiming the company had infringed a number of patents with its Android phone.
While it never went as far as a formal suit, HTC agreed to pay a licensing fee. According to Citi analyst, Walter Pritchard, that fee is the not-to-be-sneezed-at $5 per device. Meanwhile, Microsoft licenses out its Windows Phone 7 at a guesstimated $15 per device.
Last time both players disclosed numbers, Microsoft claimed to have peddled 2 million Windows Phone 7 licenses, or approximately $30 million in sales.
At last count, overachiever HTC had sold approximately 30 million Android devices – times that by $5 and you’ve got yourself a whopping $150,000,000.
Market intelligence website Asymco went as far as to suggest Microsoft should be thanking its lucky stars for Android.
“Google’s Android seems the best thing that could have happened to Microsoft’s mobile efforts, ever.”
The folks at Mobile Crunch speculated that Microsoft may have similar deals in place with other Android-building big players such as Samsung and LG.
Analyst Pritchard went one further, claiming in his report that Microsoft is already suing other Android phone makers, and is looking for $7.50 to $12.50 per device.
Since Mobile Crunch originally posted its article on May 27, a number of sites have picked up the story, including the UK’s Guardian. The Guardian spoke directly to HTC regarding the $5/device figure being bandied about.
The manufacturer’s initial response? “Oh, that sounds far too high. I don’t think we’d be paying that.” Shortly after, a slightly more polished statement was released: “Last year, HTC and Microsoft did announce a licensing agreement for Android handsets. Such agreements are not unusual in the wireless industry, and as is the case with all such agreements, HTC does not disclose financial terms.”
TheNextWeb’s Matt Brian also reported that HTC’s chief financial officer Jung Chueh-sheng came out on the defensive, stating that the company’s gross margin was steady at 29-30 per cent over the previous four quarters regardless of the increased licensing fees. So there.
HTC is the largest Android mobile phone supplier in the world, shipping 9.7 million units in the first quarter of the year. What’s more, it also produces Windows 7 Phones – so lucky old Microsoft pockets the ker-ching either way.