When I ask you this question: ‘When HTC sells an Android smartphone, who profits?’, the most common logical answer would be HTC, and probably Google, which also benefits indirectly when phone buyers use the Android OS.
Surprisingly, one more company makes a neat profit for every Android phone that is sold by HTC. It’s Microsoft. Thanks to a patent infringement lawsuit settlement with HTC, Microsoft gets $5 for every HTC phone which runs Android.
According to Walter Pritchard, the Citi analyst who revealed this information in his report, Microsoft is also planning to go after other Android device partners, looking for up to $12.50 per device.
While its own mobile division is bleeding money, Microsoft is actually planning to make money from the sales of its biggest competitor – Android.
If every Android manufacturer has to pay a fee for using the Android OS, the OS is not actually ‘free’. This may push manufacturers to skip Android (which is unlikely, but not impossible), and go with Windows Phone 7, to avoid litigation fees and stop paying patent fees to Microsoft.