May 27, 2011 | by Andrew Kameka
Microsoft may not have a runaway success in Windows Phone 7, but don’t think the company is too worried at the moment. Aside from a major “Mango” update that might make Windows Phone 7 more appealing, Microsoft can rely on the steady stream of money that it makes from Android products.
Asymco estimates that Microsoft makes five times as much money from Android sales than it earns from sales of Windows Phone 7. That’s because Microsoft pressured HTC into paying a $5 per device licensing fee based on alleged patent violations in Android. Since HTC has sold an estimated 30 million phones since the deal was reached, the $5 fee translates to $150 million. That’s a great deal more than the estimated $30 million Microsoft has so far made licensing Windows Phone (2 million phones at $15 per device).
While this is just an estimate and cannot be taken as fact, it’s a reminder of why Microsoft is going after practically any company that produces Android products. Microsoft alleges that there are patent infringements at the core of Android, so everyone releasing an Android phone, tablet, reader, or other device must pay a licensing fee ranging from $7 to $12 per device sold. Microsoft has been in negotiation with multiple device makers and has already filed suit against Barnes & Noble and Motorola.
Microsoft would surely prefer to have Windows Phone 7 be more successful, but the company will have to settle for revenues produced by Android’s popularity for now. Hey, Microsoft could use some more cash after paying $8.5 billion to acquire Skype earlier this month.