Microsoft is making money on phones... by patent trolling

Windows Phone 7

Microsoft always knew they would be successful in the mobile phone industry. With the Windows Phone 7 not making the splash that they’d hoped, they turned to another business model that seems to be working out just fine for them.

With a mere 2 million licenses for WP7 sold so far (compared to 350,000 Android phones activated daily) and with an estimate $15 per WP7 license, revenues from that end are around $30 million. Compare that to the patent settlement they received from HTC over intellectual property infringement in which they receive $5 for every HTC phone running Android.

At approximately 30 million HTC android devices shipped to date, Microsoft is set to get around $150 million there. That’s 5X what they make on their own phones.

The “business model” seems to make sense, so Microsoft is currently going after other Android phone makers and seeking $7.50 to $12.50 per device. If they win a couple more settlements, they could be extremely profitable in the mobile industry simply by coming up with ideas.

If you can’t beat ’em, sue ’em.

Written by Rocco Penn

A tech blogger, social media analyst, and general promoter of all things positive in the world. "Bring it. I'm ready." Find me on Media Caffeine, Twitter, Facebook, and Google+.

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  • Mike

    This would not meet anyone’s definition of patent trolling. Either companies are allowed to get patents and then exercise their right to exclude or not.  Success in the marketplace is not a prerequisite for patentability.

  • Never even thought about it liek that before. Wow.

  • plr

    Microsoft is playing dirty again, doesn’t HTC come in any other OS?

  • Anonymous

    If manufacturers want to use ActiveSync to hookup to Microsoft Exchange and use other Microsoft technologies they should pay to licence it. Do people really think they should they be able to get away with not paying because Android is supposed to be “open source”?

  • Jenjen

    The author of this article might not understand what a patent troll is.  We’ll never know, because it is a poorly-written article: it doesn’t tell what the patent is.  If it is a patent Microsoft uses, then they are not patent trolls.