Microsoft is making money on phones… by patent trolling

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.