Many of us oft wonder how Microsoft makes coin from Android OS. The revenue probabilities indicate towards the products that Microsoft creates for Androids. But then, aren’t they freemium goods? I mean, Word for Android or Office for Android in addition to things similar that are available for gratuitous to Android users, in addition to in that place are no subscription, etc. plans that mightiness indicate towards Microsoft making coin out of such products.
How Microsoft makes coin from Android
While it is truthful that Ballmer had pointed out that freemium products volition assist Microsoft earn inward the longer term, they lone cannot hold upwardly the root of revenue Microsoft earns from Android OS.
We also had carried an article where nosotros explained how freemium products heighten revenue for Microsoft. They exercise furnish a fight of revenue, but it is non the consummate picture.
It is estimated that Microsoft earns anything betwixt $5 in addition to $15 for every novel Android device sold inward the mobile telephone market. Samsung has paid or so $1 billion to Microsoft inward final 2 years for transportation in addition to selling novel phones running Android. Thus, the major root of revenue for Microsoft from Android are non freemium products. Then what is the source?
According to BBC in addition to few other sources, Microsoft charges “patent usage fee” from telephone in addition to tablet manufacturers that run Android. You mightiness wonder how that is in addition to what patents does Microsoft accuse for because Android is considered to a greater extent than of Google. There are many things to hold upwardly considered inward this respect.
One of the examples provided is the FAT file system on Android phones. The FAT file arrangement was developed past times Microsoft dorsum inward the days when it used to industry MS-DOS. The FAT file arrangement allowed for longer file names (up to 255 characters long). Before FAT32 system, filenames were allowed alone to hold upwardly 8 characters long. FAT is a file storage arrangement that allows longer filenames that the operating arrangement would shorten in addition to shop inward backward compatibility form. Before FAT, spaces were non allowed inward filenames. With FAT, filenames similar My Documents are stored equally My%20Doc 1 that satisfy the requirement of filename having only 8 characters long. Since Android employs the arrangement to shop files in addition to folder names, Microsoft charges a patent fee from device manufacturers.
The FAT file arrangement is only i of the Microsoft inventions that Android employs. There are many other such modest things that – though tin flame hold upwardly overlooked – involve permission from Microsoft. It is non clear if most of such inventions were fifty-fifty patented past times Microsoft legally.
Some enjoin that Microsoft cannot win a legal battle over patent fee if the consequence is taken to courts. But the amount of coin a device manufacturer would own got to pass on legal battle would hold upwardly much higher than agreeing to pay the patent fee. Thus, the device manufacturers sign a non-disclosure understanding for patent usage. It is non clear how much each device manufacturer pays to Microsoft towards patent usage fee equally Microsoft does non declare it separately inward its remainder sheets. It includes the amount inward the sectors that are running inward losses – such equally Xbox in addition to Skype – in addition to covers the losses thus.
BBC reports that Microsoft received well-nigh 1 billion dollars from Samsung to purpose the former’s technologies inward Google’s Android. The amount was a hugger-mugger until Samsung refused to pay the patent fee afterwards Microsoft’s acquisition of Nokia – maxim that it volition hold upwardly using the technology scientific discipline used inward Nokia in addition to so would non hold upwardly liable to pay anything to Microsoft.
Besides Samsung, in that place are other companies similar HTC, LG, Acer in addition to Celkon that purpose Android OS on their handsets. There are all the same smaller companies – local to their countries in addition to Microsoft does non function out its portion anywhere.
I promise this answers the question how Microsoft makes coin from Android. It is non only the freemium products. In fact, freemium products are only a modest percentage. The major income for Microsoft is the patent license agreements betwixt Microsoft in addition to mobile telephone manufacturers.