Feeds

Microsoft gets five bucks for every HTC Android phone

Analyst spills royalty payment beans

Beginner's guide to SSL certificates

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. ®

Intelligent flash storage arrays

More from The Register

next story
Microsoft to enter the STRUGGLE of the HUMAN WRIST
It's not just a thumb war, it's total digit war
Tim Cook: The classic iPod HAD to DIE, and this is WHY
Apple, er, couldn’t get the parts for HDD models
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
Caterham Seven 160 review: The Raspberry Pi of motoring
Back to driving's basics with a joyously legal high
Back to the ... drawing board: 'Hoverboard' will disappoint Marty McFly wannabes
Buzzing board (and some future apps) leave a lot to be desired
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
New hybrid storage solutions
Tackling data challenges through emerging hybrid storage solutions that enable optimum database performance whilst managing costs and increasingly large data stores.
Business security measures using SSL
Examines the major types of threats to information security that businesses face today and the techniques for mitigating those threats.