What If I Told You Microsoft Was Making More Money on Android Than on Windows Phone 7?

Yep, you heard that right. Microsoft makes more money from Android’s success than they do the success of their own platform. A lot more. You had to guess that in a world of an ineffective patent system, someone somewhere would try to bank off of Android’s fast-growing success. And you had to guess that it’d be one of their biggest competitors (as far as their name goes, anyway) in this space.

Microsoft gets at least $5 for the sale of every HTC phone due to patent infringement settlements that were agreed upon in courts. Doing some quick math, one analyst took the amount of Android devices he estimates HTC’s sold to date – 30 million – and came up with $150 million. He did the same with Microsoft, taking their 2 million units sold to date and multiplying that by $15, the cost for OEMs to use Windows Phone 7. That came out to be just $30 million.

And that’s just HTC alone. Microsoft is looking to get the same break from other Android manufacturers to get anywhere between $7.50 and $12.50 per license. It’s amazing and does well to exploit the problems with today’s patent system. All you need to do is stake your claim to fame on a certain technology and wait until someone hits homerun on it.

I won’t deny Windows Phone 7 is great in its own way, but it certainly hasn’t been as successful out of the starting gate as everyone thought it’d be. Android wasn’t immediately successful right away either, but Microsoft had years of experience and marketshare under their belts. Only time can tell if they’ll just continue riding the coattails of Android or if they’ll really break into their own as far as mindshare and market share go, but as it stands, they need Android to make significant amounts of money in mobile licensing. [Business Insider via BGR]

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  • Richard Yarrell

    Guess that’s the only way they will stay viable it is what it is. Regardless android rules and always will.

    • Flavio M

      not until they iron out all the kinks in the OS. My friends Nexus S loses signal for no reason. Google acknowledged the problem but they are still working on a fix. I have a Vibrant and I’m STILL waiting for 2.3 to be officially released. Fragmentation is also a problem. The Apps written for Android have a homebrew feel compared to the apps on iOS. Android has great promise but it needs to be polished up quite a bit. 

      • Brandon Girod

        None of this is true. Signal loss is due to the radio, the carrier, how the carrier implemented an update, your location, and several other variables. None of which is really Google’s fault. Samsung and the carriers are responsible for bringing OTA updates to your phones. A lot of really popular iOS apps are available on Android. You describe some apps as being homebrew like it’s an insult. I know several “homebrew” programs that are better than ones you can buy. You’re subject to your own opinion. But don’t spew misinformation and flawed perception. 

        • JoeHTH

          All of it is true. Don’t try to tell me what the hell I know. Try popping Google’s tool out of your mouth.

          • Wizoz

            Joe H Troll H
            Profane troll

      • http://profiles.google.com/daniel142005 Daniel Weisinger

        Sadly I’d have to agree. As it stands now custom roms like CyanogenMod are much more stable than stock… and these overlays like MotoBlur and TouchWiz are just horrible.

        • JBrowne1012

          Motoblur is horrible, TWiz 3.0=awesome 

          • sansenoy

            tjizz = awesome??? are you still in grade school or what?

      • JBrowne1012

        My Nexus S doesn’t lose signal for no reason. Hell my Nexus S rarely loses 3G here in San Antonio. Unless your friend has the NS4G then he/she may just have a defective device or their signal is just bad in their area. Fragmentation is only a problem to like maybe 10% of America at the most. In any case the differentiation between the latest upgrades are very minimal. 2.1, 2.2 and 2.3 are practically the same. 2.3 most certainly is more polished though. The app creators in android aren’t paid by google to make the highest quality apps. Its an open market what do you expect? Apple’s crap may seem polished but thats because they get paid more to do it on iOS

    • squiddy20

      Ummmm you know we’re talking about Microsoft here, right? The same Microsoft that is practically a monopoly in the business and domestic world with their Office suite, and Windows OS (for desktop/laptop computers)? Even with a somewhat floundering phone market (WP7), Microsoft isn’t going anywhere soon.

    • JoeHTH

      As an Android user for 9 months, it is clunky, cluttered, choppy, fragmented pile of sh*t. Basic features that should be easy to use are buried under layers. The OS is mess, regardless of it’s success.

      • Wizoz

        Joe H Troll H

  • Chimphappyhour

    Sure W7 will make its own break, on the coattails of Nokia. If they can’t make it with Nokia, then they just aren’t going to make I suspect.

    • Dession

      It’s going to be Android -> WP7 -> iOS. I wonder what’s going to happen to Blackberry. They need to be bought by someone.

      • http://techdomino.com/ Lucian Armasu

        Android barely beat iOS by being used by *all* manufacturers. I don’t think WP7 will be used by all or pushed as hard as they push their Android devices, so I don’t think they can beat iOS. Plus, Apple never stands still either. Imagine if they actually release that low-end $200 contract-free iPhone that was rumored a while ago. It would give even Android one hell of a fight in market share, and would let WP7 way behind. There’s a rumor they might start putting iOS on notebooks, too. Don’t expect Apple to gain market share only from current iPhone and from current iPad in the next few years.

        • http://www.facebook.com/profile.php?id=1787373408 Austin Nichols

          i think putting ios instead of osx on the ipad was a fail and there going to move it into netbooks……..   why would anyone want that theres not even a file system. i could just see them now  saying “give me a minute i have to sync my  notebook with my itunes”

        • JBrowne1012

          You forget that iOS isn’t only iPhone, its the iPad and so on and as well they are the iPod touches. I’d like to see the information on how the iPhone in specific is competing against android. 

          • M_1

            Both Google and Apple spend a lot of time quoting quarterly sales and daily device activations, but if you dig for the number of devices in use, in the US Android has iPhone beaten almost 2:1 as of April’s numbers, and globally the ratio is about the same but the total percentages are smaller because Nokia still has a small slice that doesn’t exist stateside.

      • http://twitter.com/kujayhawks77 Michael Radcliffe

        I think Android->iOS->Blackberry->WP7 is more accurate. 

        • JoeHTH

          Then you’re a delusional idiot. RIM’s market share is falling off a cliff, and with the enterprise features Microsoft is adding to WP7, it will start taking market share away from Blackberry.

          • Martoz

            Troll again…

          • hyouroh

            Maybe (to quote you earlier) “You need to get Microsofts tool out of your mouth”. Just saying.

      • mytwocents

        Blackberry has a comeback in the works…you will see it soon.

  • Bcam117

    I often hear people bitching about the american patent system, but how is it different to the rest of the worlds? Just wondering if it is actually to blame or not. 

  • MarcusDW

    So WP7 is a $15 app?  Funny from that perspective.

  • moises1204

    If only hp would get up their ass and start making better form factor with their phones maybe we be talking about the webos right now, but they keep on clinging on to that stupid pre like is the best thing there is, if they make phone that resembles like the galaxy s2 or the htc sensation i bet people will buy it.

  • http://twitter.com/dtg295 Jon

    I still think Windows Phone 7 will be successful. I don’t think it can ever achieve what android has but it will have it’s own chunk that may one day exceed Apple’s given they can at least get multiple OEMs on board. 

    • Going_home

      If you want to play Xbox live on your phone it will have to be a WP7 device.
      Although I personally think its too little and too late for Microsoft to be a major contender in the cell phone arena, Sony is banking on Android.
      Not that I care about draining my battery playing games on my phone.
      Phone calls, email, texts, web browsing…thats all I use it for, not games.
      Not interested in games honestly.

      • Len

        Android has potential to be a full blown desktop pc. Just needs the dev base and time. I see no reason it couldn’t run an xbox emu like any other emu. Though I expect steam to come first.

      • M_1

        Not sure why you brought games into this.

        Android was a curiosity at the start of 2009. Now it has majority share by a huge margin in the US and a very comfortable lead globally — in only three years. It doesn’t take long for the mobile market to make dramatic shifts.

        The increasingly powerful hardware plays right into Microsoft’s hands. Their biggest issue was always trying to cram too much into hardware that wasn’t really up to it. Those days are already behind us… don’t write them off yet.

  • moises1204

    Imaging if hp put its webos on to the Samsung focus, i know lots of us would get it.

  • QuantumRand

    But how much does Microsoft make from bundled software with WP7 and various subscription services and whatnot? I’d be willing to bet it’s a lot more than they may from Android.

  • Kevin

    Umm… obviously it must be hard to make money from an OS that nobody likes. Apparently the big money for MS comes from Windows Mobile 6.5, that’s their cash cow according to Comscore, ha ha ha.

    Does the analyst actually believe OEMs pay to put WP7 on their phones? He estimates 15$ per phone, as has been speculated by others, I am almost certain the money paid to license WP7 is kickbacked to the OEM by an advertising allowance or some other exchange.
    Also I’m thinking after the B&N lawsuit and the Motorola lawsuit are finished this whole MS-riding-android (Oh man can you guys please change the picture of this article to Ballmer riding on the Android robot!) house of cards is going to fall pretty hard.

    • JoeHTH

      “obviously it must be hard to make money from an OS that nobody likes.:

      LOL! I know at least 20 people who love it. The tech blogs and journalists gave it very good to great reviews. So you are full of sh*t. So go shove your head back up Larry Page’s butt.

      • wizoz


      • Hyouroh

        Lol, cause 20 people to makes it so everyone must like it. Tell you what you give me 20 people that love it and I will give you 20 developers that hate it. 

  • http://www.facebook.com/profile.php?id=1350605511 Andy Wheeler

    Actually, Microsoft is making the MOST money on “Photosynth” for IOS.  One of, if not the hottest app for iPhone right now.  So just try to figure that one out!

  • Maverick

    As I understand it WP7 has a consistent experience since they don’t have skins placed by manufacturers, correct me if I’m wrong on that. If that’s tue they may very well succeed since they will have control over the os/ui experience, not to apples degree but beyond android. I’ve owned 5 androids and every one had bugs. The vibrant was so bad that I gave up on android altogether. Android has great features, but I think google could take a hit because of shoddy software shoved down the throats of consumers by motorola htc samsung and so on, my nexus one was by far the most stable. My samsung vibrant and htc mytouch 4g were so buggy that I received multiple replacements for both, eventually tmobile threw in the towel on the vibrant and sent me the 4g, and eventually I threw in the towel on the 4g and went to iPhone. I’d like to come back to android but using the iPhone has raised my expectations substantially regarding os/ui dependability and stability. And if I were to get a different phone I would definitely try out a windows 7 before just jumping back to android. All 3 are great operating systems though and I’m so happy to have more than 1 or even 2, the competition is ceiling innovation as we can through all the phones being released with better and better hardware (hopefully android for androids sake doesn’t forget about software though)

  • http://cyberfish.110mb.com Jake

    WP7 has awkward UI unlike Android, and will therefore never be successful as Android is. Period.

  • WickedToby741

    This is kind of ridiculous but its no one’s fault but HTC’s, and it doesn’t seem to be hurting them much or Android for that matter. Microsoft has money, so this really doesn’t change much in that aspect. They have yet to prove they know what to do with it in the mobile space. I think Windows Phone 7 is a step in the right direction, but they have a long ways to go. But back to my point, its HTC’s fault for folding and settling. Everyone else is fighting it and seems to be holding up pretty well. I’m not saying settling was a bad decision because now they’re in Microsoft’s good graces, but that was their choice.

  • http://twitter.com/drdougdeep Dr Doug Deep

    Whatever. I can’t remember which patents MS licensed to HTC, but I do remember most of the patents they were licensing to device manufacturers were file system patents.  For example, camera makers using FAT and NTFS on memory cards, but not licensing the technology.  Sure, those file systems are old in computing terms, but that’s not relevant here.  You’re seriously mistaken if you think inventing file systems in the early world of computing is “resting on laurels”.  

    If you want to bitch endlessly about software patents, head over to Slashdot.  Everyone left that blog except the patent whiners.  Stick to Android awesomeness.

  • http://www.techendeavour.com Aggarwal Rahul

    I think the HTC are under a fair
    deal with Microsoft for usage of their patent technologies in their
    smartphones. As far as the irony of the situation goes, its perfect to have
    earning with Androids, the competitors of the MS being a source of revenue
    generator is a rare case in business enterprises. The MS is a power house of
    talent that creates the most valuable technologies that is a necessary to all
    kinds of users.