Microsoft reportedly earns roughly $2 billion per year from Android patent fees

- Advertisement -

As you may already know, over the last few years Microsoft has aggressively went after Android manufacturers, forcing them into patent agreements due to claims that Android violates the Redmond giant’s existing patents. Back in May we even reported that Gartner claimed Microsoft could be earning as much as $8.8 billion from Android patent licenses by 2017.
But how much does Microsoft really make from Android right now, and what do they do with the money that they earn? According to Nomura analyst Rick Sherlund, the number is right around $2 billion and allegedly all the money is used to conceal losses to its “entertainment and devices division”. This division covers products like Xbox, Skype and even Windows Phone. Most of the losses are supposedly related to the Xbox.
If you’re wondering how Sherlund reached his estimate, basically he took to the assumption that Microsoft makes around $5 per unit on each Android device sold, and that roughly 70 percent of Android devices sold are covered by an agreement.

Even if Sherlund’s numbers are guaranteed to be exact, it’s still safe to say that Microsoft’s patent arrangements have proven reasonably profitable for the company.

He then looked at various estimates on how many Android devices were selling per year, and suggested that at least 90% of the money brought in from the patent arrangement turns out to be pure profit for Microsoft.
The end figure reached by the analyst is that Microsoft made $1.6 billion in the 2013 financial year and is set to make around $1.73 billion in the fiscal 2014 year.
Now it’s important to realize that this figure relies on a lot of assumptions and guesstimates. We don’t know for sure how much Microsoft actually makes per Android device. Most analysts suggest anywhere from $1 – $15, depending on who you ask.
The idea that Microsoft’s patent arrangements apply to 70% of Android devices is also something that we can’t say with complete certainty — though considering they have agreements with most of the top Android manufacturers across the globe, we wouldn’t be too surprised if that figure is close.
Even if Sherlund’s numbers are guaranteed to be exact, it’s still safe to say that Microsoft’s patent arrangements have proven reasonably profitable for the company. On the low end, we are talking about closer to a billion a year. If the estimates of $15 per device are true (which we doubt), we could be looking at a whole lot of cheddar.
Of course, even if Microsoft is profiting from Android, it’s also holding the company’s own mobile efforts back, which means that Android’s prosperity still hurts Microsoft more than in helps. The good news for Google is that Android’s grasp over the market is strong enough that even Microsoft’s leeching really doesn’t hurt Android in any major way.
What do you think of the estimate that Microsoft makes nearly $2 billion a year on Android? Do you think the numbers are correct — do they surprise you?

Source

- Advertisement -

Related Articles

What is SLED, how realme gave TV industries a new look with the help of this technology?

Realme has also made a strong place in the TV segment after smartphones. The company has used SLED technology in its TV segment which...

PUBG Mobile will not return to India, PUBG Mobile Ban in India Permanent for now

PUBG News: Several Chinese apps were banned by the Indian government, including the popular Battle Royal game PUBG Mobile. The game had a large...

Samsung Galaxy A42 5G may be launch with the latest Snapdragon 750G processor, the report reveals

Samsung's upcoming smartphone Samsung Galaxy A42 5G has been in the discussion for a long time. Recently...

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Stay Connected

43,176FansLike
535FollowersFollow
45,700SubscribersSubscribe

Latest Articles

What is SLED, how realme gave TV industries a new look with the help of this technology?

Realme has also made a strong place in the TV segment after smartphones. The company has used SLED technology in its TV segment which...

PUBG Mobile will not return to India, PUBG Mobile Ban in India Permanent for now

PUBG News: Several Chinese apps were banned by the Indian government, including the popular Battle Royal game PUBG Mobile. The game had a large...

Samsung Galaxy A42 5G may be launch with the latest Snapdragon 750G processor, the report reveals

Samsung's upcoming smartphone Samsung Galaxy A42 5G has been in the discussion for a long time. Recently...

How To Protect Your Smartphone From Hackers, then follow these Tips

protect your smartphone from hackers: Smartphone usage has increased sharply in the Corona era, so hacking cases...

Vivo launched its first Smartwatch Vivo Watch equipped with a heart rate and blood oxygen sensor

Vivo has launched its first smartwatch Vivo Watch. This latest smartwatch has been made available in 42mm...