Mobile
HTC Pays $5 Per Android License… To Microsoft
You may recall Steve Ballmer talking crazy a few months ago about how Android isn’t free and that you gotta pay Microsoft to use it. Well, now there are numbers to back that up ranging from HTC’s licensing fee of $5 a pop to asking prices of $7.50 to $12.50 from others.
According to Citi analyst Walter Pritchard, HTC shells out a picture of Abraham Lincoln (on a $5 bill) on every Android phone they make. That money goes to Microsoft as part of patent settlement the two parties reached in April 2010. Since then Microsoft has gone after Motorola and Barnes & Noble to start paying their share as well, looking for as much as $12.50 per license. With product margins estimated as low as 2% on tablets, that’s not exactly chump change.
Asymco notes that, with estimated sales of 30M units, that adds up to $150M paid by HTC to Microsoft. That’s a drop in the bucket for MS, but pretty damn good for a product they don’t ship. By contrast, the estimated 2M licenses they shipped for Windows Phone add up to $30M at $15 a piece, not counting production costs. As far as money-makers go, Android is Microsoft’s top mobile seller. Almost makes you wonder if the money spent on Windows Phone wouldn’t be better spent trying to get more of their services into Android, like Amazon’s doing.
Hat tip to Business Insider
Willem Evenhuis
05/27/2011 at 10:01 pm
I cannot ignore the irony of microsoft coming forth on the fact that a certain slice of android goes to microsoft over pattent issues. You could, based on this article, argue that android is still the cheapest option, and that all windows phone 7 users would switch to android phones, immetiadetly cutting a revenue of the recent investments microsoft made for the current windows phones and upcoming nokia phones with windows phone 7. No wonder Nokia still has a backup plan with it’s symbian!