Turns out, HTC — a juggernaut smartphone brand in the Android community — coughs up $5 to Redmond for every Android phone it sells, says Citi analyst Walter Pritchard. He said the fee was part of HTC’s patent settlement over an intellectual property infringement case.
Android is based on Linux, which is an open-source OS. But Microsoft says Linux infringes on their intellectual property, and so any product made from it does as well. HTC likely went along with this to protect its relationship with Microsoft, since the company also makes WinPho 7 phones.
So, it’s fairly well-known that HTC was paying something out for this, but no one knew how much until now. And because this deal exists, it could pave the way for Microsoft’s success in going after other companies. According to Pritchard, the company wants between $7.50 to $12.50 per device from other Android manufacturers.
Presumably, one of the reasons Microsoft (and Apple, for that matter) have been suing manufacturers like HTC and Samsung is because they’re easier to go after than Google. If they succeed in incurring cost for using Android — which has been free for companies to grab thus far — they can dissuade interest and undercut the competition.
Plus, for Microsoft, these fees are actually racking up as much as five times the amount Windows Phone 7 is bringing in.