Microsoft Projected to Earn $8.8 Billion from Android Licenses Alone By 2017
In recent reports Microsoft worked out licensing deals with both Hon Hai and ZTE that center around patents for Android related technology. What we didn’t know was just how much money Microsoft was bringing in from its Android patents. During just one quarter in 2012, Microsoft brought in $790 million from its Android patents for HTC and Samsung devices alone. Now new projections have the Redmond company poised to produce 1.5 billion Android models by 2017, talk about big money.
Instead of costly court battles like the notorious Apple versus Samsung patent wars, Microsoft has simply negotiated royalties for each device sold by practically every mobile manufacturer under the sun. Motorola, ZTE, HTC, Foxconn, and Samsung are all paying Microsoft each time they sell a device or a component. Without wasting away millions patent litigation, Microsoft is guaranteed to profit regardless of what company is currently selling the most Android devices.
Although the exact licensing fees haven’t been disclosed publicly, analysts have estimated that Microsoft is raking in anywhere from $10-$25 per Android device sold. But even conservatively, if Microsoft is only making $1, $4, or $8 per device, check out the graph below to see what that means over the next few years.
Let’s look at it this way. According to If Microsoft receives $1 for 50% of each Android device sold, it would receive $430 million this year. On the other hand, if the tech giant receives $8 per device, the number jumps to $3.4 billion. By 2017, if the percentages remain the same, Microsoft could be bringing in $5.9 billion and that figure jumps to $8.8 billion if the software giant can get paid for 75% of Android phones sold by then. That isn’t terribly far-fetched considering that Microsoft says that its licensees account for about 80% of devices powered by Android’s open source OS.
It makes you wonder, if this is the kind of big money Microsoft is making on its Android devices, then why would they want to push consumers to switch over to Windows Phone. Apparently, when you’re talking in the billions, you can never have too many.
