Microsoft Secretly Earns Six Billion Dollars From Android, Here’s How

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microsoft-android-patentShort Bytes: Do you know that Microsoft holds more than 300 patents in Android operating system? This long list of patents enables Microsoft to earn tons of money as licencing fees. In this article, I’m going to tell you how Microsoft is taking away six billion dollars from Android.

If we talk about different services and technology products, we’ll find that Microsoft and Google are competing head-to-head in many areas. Unsurprisingly, Android and Windows Phone are just another page of the same story of rivalry. However, despite their vows to kill each other’s platforms, Microsoft makes tons of money each year with Windows Phone competitor Android.

If you remember last year’s revelation by China, exposing the 310 Android patents held by Microsoft, you are in a better position to understand this story. For those who don’t know, before this leak, Redmond has never revealed the patents and fee it gets from the licencing deals.

With investment in Windows Phone, Microsoft is gambling on something that could become company’s goose that lays the golden eggs. In Windows Phone devices, Redmond integrates all its services of Mail, Skype, Office, Cloud etc to showcase what they can do if they have the userbase. Sadly, Microsoft is failing on this front.

However, due to the Android patent licencing deals between the smartphone makers and Microsoft, the company is one of the biggest winners from Android’s growth. As soon as a new Android running device is manufactured, Microsoft gets a good percentage of Android patent licencing money.

Also read: Saving Apple in 1997 Was the Craziest Thing Microsoft Ever Did, Ballmer Says

According to Forbes, in the year 2013, Samsung’s royalty payment was about 1 billion dollars ($1,041,642,161 and fifty cents) making roughly $3.41 per device.

If we assume the same royalty of $3.41 per device and calculate the total money earned by Microsoft as a result of 1.808 billion smartphones, Microsoft has easily managed to earn six billion dollars with the help of Android.

In this calculation, Forbes has ignored Microsoft’s individual negotiations with phone manufacturers. If we add up the tablet sales, this six billion dollars earning goes even higher.

While Microsoft continues to lose money on Windows Phone front, the growth of Android is something that will surely benefit Redmond.

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Adarsh Verma

Adarsh Verma

Fossbytes co-founder and an aspiring entrepreneur who keeps a close eye on open source, tech giants, and security. Get in touch with him by sending an email — [email protected]

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