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Android is generating $2 billion a year… for Microsoft

Published Nov 6th, 2013 3:00PM EST
Microsoft Android Patent Licenses

Microsoft would love to sell more Windows Phones but you get the feeling that it doesn’t mind seeing Android do well either, especially if it means billions of dollars in free money every year. Per Business Insider, Nomura analyst Rick Sherlund estimates in a new research note that Microsoft makes a whopping $2 billion a year in revenue every year simply from collecting patent royalties from Android vendors. Sherlund says that Microsoft’s margin on Android-related patent royalties is around 95%, which means that the company’s annual Android haul is almost pure profit. Sherlund goes on to say that Microsoft is using its Android cash to cover up massive losses that it takes from its Xbox division, which he says actually loses Microsoft $2 billion per year.

Prior to joining BGR as News Editor, Brad Reed spent five years covering the wireless industry for Network World. His first smartphone was a BlackBerry but he has since become a loyal Android user.