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A few months back industry analyst Horace Dediu estimated that Microsoft had earned $150 million through Q1 of 2011 on the sale of Android handsets. The figure he came up with for the sale of their own Windows Phone 7 platform? A meager $30 million. With the numbers reset for the second quarter of the year, Dediu has calculated that Android earned an estimated $60 million for the software giant, nearly three times the $21 million WP7 brought in during the same time period. It all boils down to licensing fees paid to the company, specifically those owed by HTC. Somewhere in the range of $5 per Android handset sold by the manufacturer goes straight into the coffers of Microsoft. Dediu’s calculations don’t take into account recent licensing agreements reached by additional Android manufacturers, but the entire exercise brilliantly demonstrates why recent patent lawsuits brought against Google and its manufacturing partners are such a big deal. Right now Android has the biggest slice of the pie. Its competitors, naturally, want to get their own taste.
[via BGR]
Making money off of your competitor’s product is nothing new though. Many people just don’t realize this and think it is something new and only related to smartphones because of all the press lately surrounding the patents and lawsuits.
The practice of licensing your IP to your competitors and/or suing them for misuse of your IP has been a mainstay of corporate America for years. Take for instance the pharmaceutical industry. The global pharma company I work for makes approximately 30% of it’s revenue through licensing/litigation.
So thats why my Advair is so expensive. Damn. :(
one of the reasons, yes
WELL NO SHIT…. I actually never even seen a windows phone 7. they will never catch up. Google is just too big.
Besides seeing them in stores, I have only seen one person who owns a WP7 device. It’s a decent OS, but it doesn’t really stand a chance against Android or iOS.
I agree you know your mobile os is failing when you are making more off of another company. I have yet to see anyone with a wp7 phone.
Basically, folks just need to have more of their own patents to offset any patents they use from others….
Motorola in this case will be fine. Samsung too. HTC….$5 is small but I wonder what patents they own? I know about the recent S3 Graphics buy, but besides Sense UI…..what else do they have?
i used a windows phone the other day, an LG quantum, not a very good sign, it’s true, the UI is fluid, the animations are cute, but my bluetooth headset kept disconnecting, bing maps somehow didn’t work, and the app market was impossible to search… i hope that mango fixes some of that, but right now, i don’t see them catching up, now here in my country nobody wants to buy it :(
so then i have a question, #of units sold aside, when all these “bragging rights” numbers come out, is this accounted for? i’m just curious how it tips the scales when money changes hands between competitors
wp7 will rise to become a dominant force, its a Gorgeous OS, its sleeker, better looking, intuitive and integrated Os than either Android and Iphone it actually makes them feel outdated. Watch as it puts the iphone to shame when both are compared.
http://www.youtube.com/watch?v=DP9HlGB7Sy8&feature=relmfu
http://www.youtube.com/watch?v=WMd7Eb-QikA&feature=relmfu
http://www.youtube.com/watch?v=xmB87qdwVWc&feature=related
http://www.youtube.com/watch?v=qZML1LzClT4
Get out of here.
What you said almost reminds me of my (short) time being part of the Microsoft Student Partner brainwashing program.
Similar wording and stuff. They emphasized on words like “elegant” and “beautiful” when describing WP7, and “outdated” when talking about the UI iOS or Android.
Haha, good one! For even more LOLs, check this out: http://www.comscore.com/Press_Events/Press_Releases/2011/8/comScore_Reports_June_2011_U.S._Mobile_Subscriber_Market_Share
Since the release of WP7, Microsoft’s market share has continued to slide, from 7.5% to 5.8% this year… yep, well on it’s way to becoming a “dominant force”, LOL.
Microsoft needs to release WP7 worldwide ASAP. If they provide corporate MS tools like full official Office Pack and Communicator/Lync to the table maybe many corporate clients will migrate. They have the tools and the money and Mango seems not bad, lets see…
A good example of how our patent system is broken.
Even if Android is making Microsoft more money than Windows Phone, the Windows Phone is picking up speed and in a few years will surpass iPhone usage, according to a Gartner study in April 2011.