Analyst: Microsoft gets $5 for every HTC Android phone

Summary:Why does Microsoft have such a large patent portfolio? Maybe because there’s big money to be made in patents. Today’s proof comes from HTC, one of the biggest smartphone handset makers in the world.

Why does Microsoft have such a large patent portfolio? Maybe because there’s big money to be made in patents.

Today’s proof comes from HTC, one of the biggest smartphone handset makers in the world.

If you have an Android phone made by HTC, Steve Ballmer wants to say thank you. As odd as it sounds, Microsoft gets five dollars for every HTC Android device. According to a report this morning, that adds up to a lot of ka-chings—$150 million in all, based on a rough estimate that HTC has shipped 30 million such devices.

The report by Horace Dediu at Asymco says the money is part of a patent settlement:

Microsoft gets $5 for every HTC phone running Android, according to Citi analyst Walter Pritchard, who released a big report on Microsoft this morning.

Microsoft is getting that money thanks to a patent settlement with HTC over intellectual property infringement.

Microsoft is suing other Android phone makers, and it’s looking for $7.50 to $12.50 per device, says Pritchard.

Florian Mueller, who tracks patents and other intellectual property issues at his FOSS Patents blog, provides more details via Twitter:

It wasn't even a settlement: there was never a formal suit to settle. It was a license deal prior to any litigation.

Have other handset makers signed similar deals?

It's possible that many have without announcing. HTC is the only specific announcement of its kind. Plus there are broad cross-license agreements they announced with LG, Samsung etc. Those may or may not include Android now.

When Microsoft sits down at the bargaining table with handset makers, this is definitely part of the pitch.

Topics: HTC, Enterprise Software, Legal, Microsoft, Mobility, Telcos

About

Ed Bott is an award-winning technology writer with more than two decades' experience writing for mainstream media outlets and online publications. He has served as editor of the U.S. edition of PC Computing and managing editor of PC World; both publications had monthly paid circulation in excess of 1 million during his tenure. He is the a... Full Bio

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