Microsoft Gets Billions from Android

Although Android was developed by Google and all the upgradations that are going on are by Google but since it is an open source operating system, Google can’t make any money from licensing the Android OS itself.

Microsoft Gets Billions from Android

Microsoft and Google are in fierce competition with each other in many areas. Android and Windows Phone are also not an exception in it. Microsoft is taking all necessary measures of making Windows Phone more popular OS but till date it is pretty obvious that Android has way larger user base. Irony of this whole story of competition is that whether Microsoft snatches the bigger smartphones OS market share or not it wins either way.

How Microsoft still wins if Android even stays at the top? Answer of this question lies in the fact that Microsoft earns billions of dollars because of Android smartphones sales. I explain how.

Microsoft holds more than 300 operating system patents. Since Google does not own the platform as it is an open source OS and it cannot control the manufacturers who make Android smartphones and tablets, Microsoft does agreements with them over licensing Microsoft patents that are violated by the Android OS.

Samsung’s royalty payment was about 1 billion dollars ($1,041,642,161) in the year 2013 translating in to $3.41 per device, according to Forbes. Now assuming the same royalty of $3.41 per device, total money earned by Microsoft as a result of 1.808 billion smartphones is easily six billion dollars with the help of Android.

Forbes didn’t include the tablet sales in its calculation otherwise this six billion dollars earning is lesser what they are actually making.

So even if Microsoft loses the race of dominating smart phone OS market, it has its strategic and legal advantage over its competitors. The more Android smartphones are sold the more money Microsoft earns as license fees.

Microsoft is making more strategic alliances with these smart phone manufacturers to have its pre-installed apps such as office, Skype, one note, cloud etc. so that user’s dependency on google store decreases.

It is also reported that there were some litigation going on between Microsoft and Google which came to an end after several years on 30 September 2015 as both companies came to some consensus without sharing details. However they made it public that the companies will dismiss all pending patent infringement litigation between them and have agreed to collaborate on certain patent matters.

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Rebecca Jonas