Microsoft are reaping the rewards of the success of Google’s Android, as they receive $5 from every phone HTC sells according to a new report.
Microsoft and HTC came to this agreement to settle a patent dispute a while back, with HTC agreeing to pay Microsoft $5 for every Android device it produced.
The ironic thing about this windfall for Microsoft is that the deal would make them $150 million this year – if we believe that HTC sold 30 million handsets -which is sure to be far more than what they are making from their own Windows Phone 7.
HTC said it had “reached an agreement with Microsoft last year on royalty fees” and the related costs were already reflected in HTC’s accounts.
“Microsoft has made no requests to increase its royalty fees for HTC phones, ” HTC said, in response to local media reports on the issue.
Earlier in the day, it was reported that Microsoft planned to raise its royalty fees from US$5 per HTC handset to US$7.5-US$12.5 for this year.
The move will translate into at least a 50-percent increase in the royalty fees paid by HTC to Microsoft, according to the reports.
Microsoft are also suing other Andriod device makers and hope to agree the same settlements with them. They include Motorola, and more recently Barnes & Noble. However, Microsoft hasn’t had the same success with the other device makers.
Both Motorola and Barnes & Noble have put their foot down, stating that they won’t pay anything like that.
Microsoft are trying to take advantage of the fact that Google doesn’t have a lot of patents in mobile technology, since the company is fairly new to the sector.
But Google has a plan of its own; they are buying Nortel’s patent portfolio, which they said they would use against those who threaten Google and the partners that support Android.
Microsoft wants to increase the royalty fees to other Android manufacturers and feel the patent infringement is worth $7.50 to $12.50 per device sold.
Barnes & Noble said that the fee wanted by Microsoft was actually “higher than what Microsoft charges for a license to its entire operating system designed for mobile devices, Windows Phone 7″.
With Microsoft making more money from Android than from Windows Phone 7, we think the Microsoft legal department would love to spend all day suing Android handset makers.