Microsoft doing nicely out of HTC Android phone sales

By Trevor Mogg May 27, 2011

There has sure been some bizarre news around just lately. On Friday we were presented with the gruesome image of Mark Zuckerberg in blood-spattered overalls slaughtering a pig in order that he could enjoy a round of lightly buttered ham sandwiches, and today we’ve learned that Microsoft is making more money out of Android than it is out of Windows Phone. So what’s all that about?

Well, according to Citi analyst Walter Pritchard, who on Friday released a report on Microsoft, the Seattle-based company gets $5 for every sale of an HTC phone running Android.

The bizarre situation is the result of a patent agreement reached last year between Microsoft and HTC to protect the Taiwan-based company from any infringement suits that could be brought by Microsoft over the Android operating system and interface elements.

And things could be about to get even more lucrative for Steve Ballmer and his team if they have their way with other Android phone makers that it’s currently suing. Pritchard claims that with those companies, the computer giant is hoping to get between $7.50 and $12.50 per device sold.

Asymco’s Horace Dediu said in a report on Friday that “a rough estimate of the number of HTC Android devices shipped is 30 million. If HTC paid $5 per unit to Microsoft, that adds up to $150 million Android revenues for Microsoft.” As for Microsoft Windows Phone licenses, some 2 million of those have been sold. “Estimating that the license fee is $15/WP phone,” says Dediu, “that makes Windows Phone revenues to date $30 million.”

If you add to that the expected income from the other phone makers (at $7.50to $12.50 per device sold), the revenue for Microsoft will be astronomical, leaving the income from Windows Phone looking like small change in comparison. Whichever OS sells most, Ballmer’s going to have a big smile on his face (as long as he remains in charge, that is).

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