Microsoft patent royalties from Samsung and HTC totaled $800 million in Q2, tops Windows Phone sales

Microsoft patent royalties from Samsung and HTC totaled $800 million in Q2, tops Windows Phone sales
Mcrosoft collects a royalty on each Samsung Galaxy S III sold

Mcrosoft collects a royalty on each Samsung Galaxy S III sold

While Windows Phone has yet to line Microsoft's coffers with cash, that doesn't mean that the Redmond based software titan isn't making money from smartphones. According to analytical firm Trefis, Microsoft is making big bucks from licensing patents to smartphone manufacturers. Royalties from Samsung and HTC alone added up to $792 million in the second quarter of this year. HTC pays Microsoft $10 for each Android phone sold while Samsung pays $12-13 per Android unit sold. That compares wth the deal that Microsoft has with Nokia that gives the Finnish based handset manufacturer $250 mllion each quarter, but returns to Microsoft just $20 for each Windows Phone made by Nokia.

For Microsoft, these deals are a hedge aganst poor sales of Windows Phone flavored models. And while the licensing money comes rolling in each quarter, Microsoft doesn't have to pay HTC or Samsung like they do with Nokia. If Android continues to hold its huge global market share, partly at the expense of Windows Phone sales, Microsoft prospers. And should Windows Phone take off, Microsoft does well, too. Research firm Canalys shows that all of Microsoft's Windows Phone partners shipped 5.1 million handsets last quarter which lends credence to the idea that royalties from patents used by smartphones exceed revenue from Windows Phone sales.

source: Trefis via BGR

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28 Comments

1. protozeloz

Posts: 5396; Member since: Sep 16, 2010

they can just sit and watch the cash pile up

13. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

They would be even further along in the $ department if they had bailed on WP. Think of how much has been spent on WP. Have they even passed the 5.0 million user threshold?

16. tedkord

Posts: 17084; Member since: Jun 17, 2009

Or, if they'd recognized the shortcomings of WinMo a few years earlier, and gotten the jump, they could have been in Android's position now.

2. ryq24

Posts: 872; Member since: Oct 17, 2011

they should sell android phones!

6. snowgator

Posts: 3614; Member since: Jan 19, 2011

Ummmm.... MS should sell Android phones?

7. ph00ny

Posts: 1985; Member since: May 26, 2011

Aren't they indirectly selling android phones?

8. haseebzahid

Posts: 1853; Member since: Feb 22, 2012

whats the point when others doing that for them for free :P

3. MartyK

Posts: 1043; Member since: Apr 11, 2012

I can't wait until Motorola vs Microsoft get's under way.. Microsoft is going to be sorry ( hint: H264) :)

5. snowgator

Posts: 3614; Member since: Jan 19, 2011

There is a reason the other Android manufacturers are paying royalties. Motorola is a great manufacturer and I wish the two could have worked something out (like a Droid 4 running WP 8. Hey, a Gator can dream, right?), but MS will win this.

9. haseebzahid

Posts: 1853; Member since: Feb 22, 2012

well thing is Ms + nokia are the lasgest pantent holder at the monet and they both on one side other manufecturers will have to think twice before doing war on these 2 unlike Apple who dont have huge ammount of patents.

4. RapidCat

Posts: 351; Member since: Jun 12, 2012

microsoft is smart licensing their patent

10. JC557

Posts: 1917; Member since: Dec 07, 2011

MS can be scummy at times but they've been involved in software for a long time and it's good to see them licensing things out instead of hoarding then suing.

14. TortillaSlap

Posts: 43; Member since: Aug 05, 2012

id much rather see fair licencing deals instead of mass lawsuits and insults "you owe us every cent you have ever made.. and in exchange we will pay you 0.05 cents per handset in patent licencing!"

25. Whodaboss

Posts: 176; Member since: Nov 18, 2011

Yes, Apple could learn from MS.

11. Bluesky02

Posts: 1439; Member since: Dec 05, 2011

We must thanks the Android OS for helping the development of Windows Phones. Both are great OS in their unique way.

12. PAPINYC

Posts: 2315; Member since: Jul 30, 2011

ANYTHING 'tops Windows phone sales', even a kid on the corner selling warm lemonade on a hot summer's day! Sad, but true.

15. skymitch89

Posts: 1451; Member since: Nov 05, 2010

I don't see why Samsung and HTC should be paying for patents that Google should be paying for.

18. Skoll

Posts: 15; Member since: Dec 15, 2011

google dosen't sell android phones. sammy htc moto do. you can use any softwere teh world has to offer privatly but he second you try to sell it ... you know what happens

19. RapidCat

Posts: 351; Member since: Jun 12, 2012

the problem here, neither samsung or htc pay for the license patent, but the patent price included in phone price

22. lyndon420

Posts: 6444; Member since: Jul 11, 2012

Except when carriers offer these phones for $0 on a new contract.

17. theBankRobber

Posts: 682; Member since: Sep 22, 2011

And people whine so damn much about Motorola wanting what it wants from BOTH Microsoft and Apple but its OK for Microsoft to get what they want? Nah F$#@ that, Motorola, take them both to the bank and cash in.

20. Pdubb

Posts: 249; Member since: Aug 08, 2011

You want that money in the bank don't you Mr. Robber!! Makes it easy for you to do your job. **sneaky sneaky**

21. theBankRobber

Posts: 682; Member since: Sep 22, 2011

Lol hey before you finished typing I picked your pocket :)

24. wendygarett unregistered

I think moto should give ms the royalty as well... Sound fair enough... Just sayin...

27. pikapowerize

Posts: 1869; Member since: May 03, 2012

uhm no....

26. pikapowerize

Posts: 1869; Member since: May 03, 2012

oh wow... that is a very big pile of money....

28. pikapowerize

Posts: 1869; Member since: May 03, 2012

i really dont like samsung.... i dont like android... i really dont know why they are dominating.... android just has the apps but you gotta admit its really laggy, freeze a lot... samsung on the other hand just have the best hardware but look at s3 looks cheap by its all plastic face... while compare to lumia 610, the 610 looks more expensive than than s3!!! but i like android for being versatile but being open has its limits.... i hope android to go down by now... let other OS have some share too... i ask people why they buy android by samsung and they all have common answer... looks like an iPhone.. android really looks like iOS and samsung phones looks like iPhone... but i want blackberry because its OS is the real smartphone

29. jove39

Posts: 2137; Member since: Oct 18, 2011

Hahahaha...ironic for MS.

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