Isn’t Android, Googles Platform?
Yes you heard me correctly, Android the platform built mostly by Google with help from notable companies such Qualcomm, HTC, Samsung, nVidia etc is actually Microsofts biggest money-maker in the mobile sector! Reportedly generating around 5 times as much money as Windows Phone 7 is!
Heres the gist of it. In April 2010 Microsoft announced a settlement agreement with HTC over some of their intellectual property rights, as part of the agreement HTC agreed to pay $5 to Microsoft for every HTC handset they sold which according to Citi is roughly 30 million, meaning that Microsoft have been rewarded with $150 million from sales so far, and thats not including the windfall they are going to get after they have done suing the other Android handset developers.
On the Windows Phone 7 side of things in that same period Microsoft sold 2 million phone licences at a fee of $15 per license. This equals $30 million.
What Does this Tell Us
This tells us a few things.
The biggest is that it shows how little traction Windows Phone 7 is gaining. They made 5 times as much money from one handset maker through Android than they did through all the handset makers on their own platform. Wow. Whether Mango will turn this around for them is unknown (same with Nokia), but by the time that’s out we could be seeing some Ice Cream Sandwich on the horizon. Even though Microsoft is making money from Android it’s not going to sustainable business plan and the pace of Androids growth dents Microsoft’s own hopes of being the main player in this new ecosystem wars were everyone seems to integrating their services. I think Microsoft would rather be seeing more growth in their own products than being given cash for someone elses (in their perfect world they would get both).
Secondly this tells us that Google seriously lacks patents in the mobile sector. Surely buying Palm would have been worth it just for that a lone. The reason HTC is in this position is because Google have no patents on multi-touch which is present in Android, Apple sued HTC because of this, but! Microsoft also own multi-touch patents which are being licensed to HTC hence why they are being charged $5 per device. This agreement also helps them against any legal threats. Its obvious though that Google needs to add more relevant patents to its portfolio in order to help manufacturer’s feel like they are protected from being sued. It’s either that option or someone at Google is hoping that the law is changed on patents…
What do our readers think. Is this another sign of the outdated patent system? Do you feel that Microsoft is just mooching off of more successful intellectual property? Hit the comments below to tell us what you think.