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30 September 2011, 09:45

Report: Microsoft to earn nearly half a billion from Android

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MSFT Android According to a Business Insider report, Goldman Sachs' tech analyst team estimates that Microsoft will generate almost half a billion dollars in licensing fees from Android vendors, including Samsung and HTC, in its 2012 fiscal year, which began on 1 July. Goldman puts the licence payments at $3 to $6 per device, equivalent to $444 million or 4 cents per share; it sounds like a lot, but it is not a major item on the balance sheet given the firm's expected annual revenue of $75 billion.

Market researchers at Canalys estimate that nearly 108 million smartphones were shipped in the previous quarter, with Microsoft itself shipping only 1.5 million of those devices. For Microsoft to earn more with its own phones than with licences for Android smartphones, it would have to earn around $80 per Windows Phone device, which is unlikely.

It is, however, practically impossible to say whether Microsoft earns more from Android than Google does. Last quarter, Google posted a profit of $2.5 billion from nine billion in revenue. Google does not earn any money from Android licences, benefiting instead mainly from greater traffic on web sites with paid advertising. While Google does earn money that can be directly attributed to smartphones, such as from the Android Market and other Android advertising business, it doesn't list that income separately.

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