Analyst: Microsoft collects $444 million in patent fees for Android

Word from Goldman Sachs, a company with an interesting reputation to say the least, is that Microsoft will generate $444 million in cross-licensing patent fees this year from Android OEMs who make smartphones and tablets. As of yesterday, Microsoft has signed seven deals with Android OEMS, including HTC, Samsung, General Dynamics Itronix, Onkyo, Velocity Micro, Acer, ViewSonic and Wistron. Those seven deals are expected to generate between $3-$6 per device, using Goldman Sachs' numbers.

While that $444 million sounds like a lot, Business Insider points out that Microsoft generated $75 billion in revenue last year--so this is a drop in the bucket. However, that is still money that goes to Microsoft for their patents and re-affirms their position that Android is not free. While these deals won't enrich Microsoft at all, strategically, it may make OEMs second guess the advantages of using Android--either way, they have to pay Microsoft, so why not just use Windows Phones and get a more streamlined ecosystem and legal protection to boot?

Finally, at the very least, there is a certain bitter-sweet victory here for Microsoft, knowing they can fund Windows Phone development via Android sales. In the long term, this could be an important strategic decision. Plus, once you throw in the estimated $600 million in Windows Phone sales in addition to the $444 million in Android patents and Microsoft has potentially crossed the $1 billion mark for smartphone revenue. Not bad.

Source: Business Insider


Reader comments

Analyst: Microsoft collects $444 million in patent fees for Android


Let's say the analyst are wrong and MS ONLY makes $100 million dollars. This is $100M MS can use to develop WP7 for FREE!. I'm pretty sure the engineering team developing WP is already in the operating budget, but this way MS doesn't have to worry that they are paying all these engineers millions of dollars and their work is not paying off. But let's say $400M is correct, MS can us that money for developing AND creating QUALITY ads {notice I wrote quality ;)} for free. Would it be smart for MS to release a statement in the future saying the WP development as cost them nothing as a result of Android? this is awesome, no matter what company you're talking about.

I'm curious how much GOOGLE will make from Android during that time period. My understanding (which could be wildly incorrect) is that manufacturers pay nothing for Android. In essence, Microsoft might just get more direct $$ than Google from Android.Of course Google makes their money via ads, so they will doubtless make more than MS in total, but not from the direct sale of Android devices.Kinda like the double rainbow dude, I don't really know what this MEANS, but it has to sting Google. Of course neither company would consider a paltry $444 mil to be a huge sum. Just makes me curious.

Im not up to speed on why Google has to pay MS, but is it enough for MS to say to google, keep your money and shut down android (im assuming is patent related)? I wouldnt be in favor of that (i like competition) just asking.

Apparently Android violates several patents by several manufacturers (Apple, Oracle and Microsoft to name a few). You might disagree with the fact that the patents were issues at all, but they were and a company has a legal right and obligation (to shareholders)to pursue compensation. It's just business and the upstart Google is finally learning that doing not evil also means not stealing from others.Regardless of all the lawsuits, I think Google's bigger concern should be Amazon. They have their own app marketplace, they can cut licensing deals with any search engine they want and make it uniquely their own. Pretty soon, everyone may be using AMdroid instead of Android. What would prevent Amazon from moving to phones? Their ecosystem is much more appealing than Google's from a pure consumer standpoint.

After the Samsung deal Microsoft is making way more than $444 million a year on Android phone/tablet sales.