If Microsoft’s Windows Phones were selling like hotcakes, Microsoft would be shouting about it at the top of its lungs.
Instead, it included this interesting statement in its earnings report:
“Windows Phone revenue, reflecting patent licensing revenue and sales of Windows Phone licenses, increased $222 million.”
That means Microsoft lumped the money it makes on mobile patents, largely from Android/Linux device makers, with Windows Phones sales.
Nearly every Android device maker, except for Google and Motorola, have signed patent licence agreements with Microsoft. Many of them have agreed to pay Microsoft some sum of money per Android device sold, sources say.
Microsoft has never said exactly how much money it makes on these patent agreements, though back in 2011, Goldman Sachs estimated that Microsoft would bring in $444 million in 2012 from these agreements. That figure should be on the rise, as Microsoft has continued to sign on more patent customers. For instance, in April, Microsoft signed an agreement with Foxconn’s parent company, Hon Hai, to cover both Android and Chrome devices.
The good news is that Nokia, Microsoft’s closest Windows phone partner, has been selling increasing numbers of Windows phones. But sales are still modest. On Thursday, as part of its quarterly earnings, Nokia said it shipped 7.4 million Lumia smartphones in the quarter, up 32 % from the first quarter. That’s good, although it fell short of analysts expectations of 8.1 million units.
To give it all even more context, Apple reports earnings next week and analysts are expecting it to have sold 26.5 million iPhones, and generate $35.1 billion in revenue, mostly from older models like the iPhone 4 and iPhone 4S. It sold 37.4 million iPhones in the previous quarter.
So $222 million, including mobile patent licenses, shows that Microsoft has a long way to go to really get in the smartphone game.
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