goldman sachs

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

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