With Apple’s lawsuit against Samsung Mobile in full swing in the U.S., the issue of patents, intellectual property, and licensing and royalties have gained traction in consumer mindsets. Another player in the mobile field that is going after various Android smartphone manufacturers is Windows Phone OS-maker Microsoft, which has inked royalty and licensing agreements with various Android OEMs, including HTC, Samsung, Huawei, ZTE, and others. It seems that one research analyst is estimating that in one quarter alone, revenues collected by Microsoft for licensing its mobile technology IP far exceeds the amount of money it collects by selling individual Windows Phone licenses to Windows Phone partners.
According to Trefis, Microsoft collected nearly $800 million in the second quarter alone from just HTC and Samsung in royalty payments for licensing its technologies. It’s estimated that Microsoft is receiving between $10 and $15 in payment for each Android device sold by these companies.
Although exact figures haven’t been released, this lucrative deal tied to Android sales has probably generated more revenues for Microsoft than the sales of its own Windows 8 based smartphones. Microsoft’s Windows phone partner Nokia (NYSE:NOK) has been struggling to sell its phones and has been eclipsed by Samsung in worldwide market share. Microsoft subsidizes Nokia by giving it approximately $250 million a quarter but in return only gets approximately $20 per phone sold.
With BGR reporting that Canalys is estimating that Windows Phone OEMs have shipped 5.1 million smartphones last quarter, the money that Microsoft collects on licensing its technology to Android manufacturers exceeds the money it collects from Windows Phone licenses and sales.
In the past, we’ve reported that it’s been estimated that Microsoft earns nearly three times as much through licensing its technologies to Android OEMs than what it makes on its own platform.
While Microsoft may not have the market share that Android does, the success of the Android ecosystem will surely guarantee Microsoft revenue in the mobile space.
Microsoft is expected to launch its Windows Phone 8 platform this fall where a new host of devices from Nokia and other partners will also debut.
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