Feeds

Microsoft gets five bucks for every HTC Android phone

Analyst spills royalty payment beans

Gartner critical capabilities for enterprise endpoint backup

Buy an HTC smartphone and $5 of what you spent on it goes to Microsoft - even if you've just bought an Android device.

So says Citi analyst Walter Pritchard in a note sent out to investors today, according to Business Insider.

Microsoft announced the royalty payment deal - the result of a legal settlement - last year, but the amount the software giant receives was not made public. MS has alleged Android infringes its intellectual property, and has other smartphone vendors in its sights.

Pritchard reckons Microsoft is pursuing other Android handset makers for a royalty of $7.50-12.50 per device. HTC clearly got off relatively lightly by settling Microsoft's claims out of court.

According to market watcher IDC, HTC shipped 8.9m smartphones in Q1 - that's $44.5m straight into MS' bank account, if Pritchard is correct. That sounds a lot but it's small change compared to the $8.5bn cost of buying Skype, for example.

But if other Android vendors follow HTC, Microsoft stands to do better. Gartner, another market watcher, reckons 36.3m Android handsets shipped in Q1. That's 27.5m less HTC's contribution. At the low end of the range of royalty payments Pritchard suggests, that's $250m per quarter into MS coffers, including HTC's fees.

Take the upper end of the range - $12.50 per device and the total leaps to $388.25m.

That's based on Q1 2011 figures - almost all analysts and other observers expect Android shipments to continue increasing every quarter.

Microsoft can't be too forceful. If can't afford to overly annoy those vendors who're also selling phones based on its Windows Phone OS - they might just drop it, in a huff. Or they may trade lower royalties for a stronger commitment to WinPho - something Microsoft needs far more than even a few hundreds of millions of dollars in royalty payments. ®

Boost IT visibility and business value

More from The Register

next story
Apple takes blade to 13-inch MacBook Pro with Retina display
Shaves price, not screen on mid-2014 model
iPhone 6 flip tip slips in Aussie's clip: Apple's 'reversible USB' leaks
New plug not compatible with official Type-C, according to fresh rumors
FEAST YOUR EYES: Samsung's Galaxy Alpha has an 'entirely new appearance'
Wow, it looks like nothing else on the market, for sure
YES YES YES! Apple patents mousy, pressure-sensing iVibrator
Fanbois prepare to experience the great Cupertin-O
Kate Bush: Don't make me HAVE CONTACT with your iPHONE
Can't face sea of wobbling fondle implements. What happened to lighters, eh?
Steve Jobs had BETTER BALLS than Atari, says Apple mouse designer
Xerox? Pff, not even in the same league as His Jobsiness
TV transport tech, part 1: From server to sofa at the touch of a button
You won't believe how much goes into today's telly tech
Apple analyst: fruity firm set to shift 75 million iPhones
We'll have some of whatever he's having please
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.