Microsoft does have their own smartphone platform, although it’s never really done well. In fact, I don’t think it’s ever had more than 10% market share. The Windows Phone platform is really not that big, compared to Android and even iOS. One of the big things that’s missing are the apps, and one reason why I haven’t checked out Windows Phone yet.
There’s a new report coming out of Business Insider today that Microsoft seems to be bringing in about $2 billion in profit every year from Android. This is coming from information obtained by Nomura analyst Rick Sherlund. Where’s all this money coming from? Royalties. This all accounts for about 95% of the revenue in Microsoft’s gain. This is actually nearly all the profit earned from Microsoft’s patent royalties, sadly.
Sherlund goes on to say that Microsoft is using this massive profit to cover up the loss that was made in the Xbox portion of the company, to even out the estimated $2 billion Microsoft loses every year from the Xbox. However, Microsoft’s entertainment division seems to be very profitable for the company, Sherlund is also claiming that’s due to the free profit made by Android. On the other hand, Microsoft seems to be doing nothing on the Xbox struggle according to Sherlund. Which they seem to believe the Android royalties will balance everything out for them. Which it’s been working so far, so why fix something that’s not broken?
It’s not really surprising to see that Microsoft is making so much money off of Android. Microsoft has a ton of patents, and I’ve heard before that Microsoft is making a ton of money off of Android. Just like how Google makes more money from iOS than Android. Although that’s because more users are using their services, not for patent royalties.
It’s a shame that the Xbox portion of Microsoft isn’t really making any money. I thought they might be the only part of Microsoft actually making money these days.