Report: Microsoft Is Generating $2B Per Year From Android Patent Royalties

Posted Nov 7, 2013

Microsoft is hitting around $2 billion per year in revenues from Android patent royalties, according to Nomura analyst Rick Sherlund.  The Android revenue has around a 95% margin so it is mostly profit. The money generated from the royalties enables Microsoft to hide how much money their mobile and Xbox groups is losing.

Over the last few years, Microsoft reported revenues and operating losses for the Entertainment and Devices group.  This group includes the Xbox, Windows Phone, and Android royalty payments.  This group is always profitable, but this is because of the Android royalty payments.

It is likely that Microsoft is likely losing around $2.5 billion on the Skype, Xbox, and Windows Phone group.  Of that amount, $2 billion is due to the Xbox platform.

[Source: BI]