HTC pays Microsoft 5 per Android phone shipped

first_imgAnalysts at Citi have released a report on Microsoft and its overall financial health today, and one item that stood out is exactly how much Microsoft rakes in on the mobile front, but not from Windows Phone 7. Android manufacturers pay Microsoft a fee per phone sold – HTC alone pays Microsoft over $5 for every Android phone they manufacture.The money is all thanks to patent licensing: Microsoft holds a number of patents in the mobile space, and in order to use them, Android handset manufacturers have to pay a license fee to Microsoft. HTC’s payments to Microsoft are part of a patent settlement after Microsoft threatened to sue HTC for use of its intellectual property.The same Citi report points out that because the atmosphere in the mobile phone market is so prone to lawsuits, we can expect more lawsuits around patent infringement in Android in the near future. Android’s rising star comes at a price, and that price will be every company that can point to a held patent as even remotely related to technology in Google’s mobile OS trying to get a piece of the action.To put things in perspective, HTC has shipped approximately 30 million Android phones. If HTC has had to pay Microsoft $5 for each one of them, that’s a $150 million check for Microsoft based on sales of a competing mobile OS. Best of all, Microsoft doesn’t have to do anything to collect that money – just continue to hold and defend its own intellectual property.By contrast, it’s arguable that Microsoft has seen anywhere near that kind of revenue from sales of Windows Phone 7 devices, and certainly not that much in profit when operating and development costs are considered. All of this is good news for Microsoft and for Android developers, actually. Microsoft has opted to license its patents instead of trying to use its IP muscle to cripple Android entirely, and the license fees are manageable enough that Android handset manufacturers keep making phones.For the time being, it’s a win-win. Still, with Microsoft pushing harder into the smartphone and tablet space, with Windows Phone 7 and ARM-capable versions of Windows 8, their tune could change at any moment.Read more at Business Insider and Asymcolast_img read more