Microsoft earns about $3.21 from each Samsung Android device sold

[visualbuffs]

The court case between Microsoft and Samsung has provided the world with new information about the royalties that Microsoft charges Android vendors. While we know that Microsoft has been going after nearly anyone who makes a device that is powered by Google's mobile OS, how much Microsoft was making per unit sold has always been somewhat of a mystery.

But, thanks to new information from the court case, we know that Samsung had to pay Microsoft over $1 billion in payments for 2013. Using this figure, we can work backwards to get a rough estimate of what Microsoft earns from each Android handset sold.

For starters, look at the announcement of the Samsung and Microsoft patent licensing agreement, it mentions smartphones and tablets. Using these two items, if we view the Gartner's reports for 2013, we can see that Samsung had sold 299,795,000 smartphones in 2013 and 37,411,921 tablets running Android.

The issue with Samsung's smartphone figure is that it includes devices that run Windows Phone and its own OS, Tizen. Using the same Gartner figures, we can conclude that, based on overall market percentages of Samsung's sales, that about 96% of the phones Samsung sold were running Android. We came to this number by adding up Android's market share of 78.4, iOS 15.6 (since Samsung can't make devices with this OS) and then backed out the 3.2% for Windows Phone and we generously gave Tizen .9% which left us with a gap of 1.9% that we added to the Android value to come to the 96%.

So, doing that math, that gives us 287,803,200 smartphones that would generate a royalty and 36,626,271 tablets (doing similar math as the smartphones) that would create payment for Microsoft for a total of 324,429,471 devices generating a royalty. Seeing that Samsung paid Microsoft $1.042 billion (thanks Ed) , we can determine that the payment is about $3.21 per device.

Yes, we are aware that there are quite a few assumptions in these figures, but they are not wild guesses and are conservative estimations. After-all, Microsoft likely won't ever tell us the exact figure, so this is the best we will see for some time or possibly ever.

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[SPECTRUM]

nothing new, even Microsoft receive money from Apple devices, specially movile devices.

[LeeSmithG]

Why is this news?

I am sure there is a business website or a trash can than would be pleased to dispose of this information.

[mjall]

I'm impressed by this news; way a go Gates :)