Analyst: Microsoft gets $5 for every HTC Android phone

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.

SHARE:

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

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

72 comments
Log in or register to join the discussion
  • RE: Analyst: Microsoft gets $5 for every HTC Android phone

    Hopefully this should raise the price of Android phones and steer customers away from them.
    angarita calvo
    • RE: Analyst: Microsoft gets $5 for every HTC Android phone

      @angarita calvo
      Are you nuts? Android is the best thing to hit the smartphone market. No one on this planet can claim it was the iPhone... that's not even a smartphone (how the heck can you claim smartphone if it can't even multi-task?).
      beidsvold
      • Ah, spoken like a true, totally disconnected from reality

        techgeek. To the end-user, multitasking means I can move away from my app, have it continue playing music or getting skype notifications in the background, then I can go back to it and pick it up where I left off. They don't give a rat's A$$ on HOW it's done.
        fr_gough
      • RE: Analyst: Microsoft gets $5 for every HTC Android phone

        @beidsvold - Also, why, precisely, is Android "the best thing to hit the smartphone market"? It's just Google's attempt to keep up with iOS. Android is pretty much just a container for apps that you switch between. How is that significantly better than iOS?
        bitcrazed
      • RE: Analyst: Microsoft gets $5 for every HTC Android phone

        @beidsvold Hey dude, the whole world came to know about a word called "Smartphone" was due to iPhone. Let's not fool ourselves. Google never produced any product out of innovation.
        jinishans
      • Android is brain dead

        @beidsvold

        It has an anemic applications market leaving developers to starve and a sophomoric multi-tasking model out of a second year CS major project.
        Bruizer
    • Right! ;-)

      @angarita calvo

      Those steered away from Androids should be steered to WP7 instead where they will not pay $5 to Microsoft! ;-)
      Solid Water
      • RE: Right!

        @Solid Water

        No, they will pay a lot more, given that WP7 stands for Windows Phone 7. Best joke that I've heard today, IOW its the only one.
        RealAusTech
      • RE: Analyst: Microsoft gets $5 for every HTC Android phone

        @RealAusTech

        Given that the license fee for WP7 is $10 and they have a lot of deals on pricing, the average price difference for HTC between licensing WP7 and using Android just became quite small.
        SlithyTove
      • RE: Analyst: Microsoft gets $5 for every HTC Android phone

        @Solid Water
        Better to put $5 in MS coffers and get a decent phone than to be saddled with WP7!

        That should get the trolls going... Funny how so few of them have infested this thread (yet). Probably because it is the weekend and they are away from their desks at Redmond.

        Just as well that Ed Bott continues his unabated bashing of Apple and Linux/Android as well as defending Microsoft at every turn to support the trolls efforts.

        Seriously, if MS products were half as good as the trolls make out (and Apple and Linux were half as bad as they pretend) then it would be all over, red rover. But no, the trolls and shills keep on denying facts and reality. They are good for a laugh, though!
        rahbm
    • Only HTC phones

      It will add about $15 to the price of HTC phones.

      Microsoft tried this on with many vendors, but the patents are so weak they have to sign an NDA even to find out the claims MS is making....
      Barnes and Noble refused to cooperate, and reading the patent claims MS is making are bogus.

      http://thenextweb.com/microsoft/2011/04/27/barnes-noble-spits-on-microsoft-over-patent-dispute/
      guihombre
    • RE: Analyst: Microsoft gets $5 for every HTC Android phone

      @angarita calvo

      Microsoft is the EVIL
      Sultansulan
    • RE: Analyst: Microsoft gets $5 for every HTC Android phone

      @angarita calvo

      Microsoft is the son of the Evil....
      Sultansulan
      • Nay

        Microsoft is the ultimate ancestor on down to the last descendant of evil, each generation trying to outdo the prior.

        Well, maybe there is some good in them, they aren't (as far as I know) responsible for Budweiser.
        ego.sum.stig
    • RE: Analyst: Microsoft gets $5 for every HTC Android phone

      @angarita calvo

      HTC's Microsoft problem is confined to the USA because pure software patents fortunately don't exist in other countries.
      DonRupertBitByte
    • RE: Analyst: Microsoft gets $5 for every HTC Android phone

      @angarita calvo
      "... this should raise the price of Android phones and steer customers away from them." Unlikely, as an Android phone is still better value. MS will probably make more money from THIS deal than from any WP7 phones!
      rahbm
    • RE: Analyst: Microsoft gets $5 for every HTC Android phone

      @angarita calvo

      Ed, I see no mention of a $$ amount in the Microsoft Press release ... where you getting your data.
      BrentRBrian
      • Read the story again

        @BrentRBrian

        Read my post more slowly this time and you will see the source. Here, maybe this will help:

        "Microsoft gets $5 for every HTC phone running Android, according to Citi analyst Walter Pritchard, who released a big report on Microsoft this morning."
        Ed Bott
    • RE: Analyst: Microsoft gets $5 for every HTC Android phone

      @angarita calvo
      hopefully!
      LavarockDavidson
  • What happened to Motorola's suit?

    You know where, Motorola the only handset company to say "No" to Windows Phone 7 found themselves hit with a MS lawsuit...

    Interesting times - personally I'd love to see Motorola take MS to a jury trial and come out victorious.
    itguy08