It's no secret that Microsoft's Windows Phone 7 operating system has gotten off to a slow start. Microsoft CEO Steve Ballmer has said that the smartphone operating system came to market about a year too late; hence it's facing stiff competition from seasoned competitors like Apple's iOS and Google's Android.
Currently, Windows Phone 7 is treading water with a 1.6 percent share in the global smartphone sector during Q1 2011 according to Gartner. To say that Windows Phone 7 isn't adding much to Microsoft's bottom line would be putting it mildy at this point; at least not until its partnership with Nokia kicks into full gear.
Keeping this information in mind, a Citi analyst reports that HTC is currently paying Microsoft $5 for every smartphone that it sells running Google's Android OS. The payments are a result of a patent settlement that Microsoft reached with HTC.
Horace Dediu of asymco took things a step further and reckons that HTC has shipped around 30 million Android-based smartphones. With royalty payments of $5 per device going to Microsoft, the boys from Redmond have received around $150 million thanks to sales of Android smartphones.
Microsoft claims that it has sold two million Windows Phone 7 licenses -- Dediu estimates $15 per license -- which would bring revenues from its latest smartphone operating system to $30 million. If these numbers are accurate, Microsoft is currently receiving five times as much money from Android than it is from its own smartphone OS.
As Ballmer stated back in March 2010, there are plenty of costs involved for manufacturers when it comes to putting Android OS on smartphones. "There's nothing free about Android," said Ballmer. "I mean at the end of the day as we certainly have asserted in a number of cases you know there's an intellectual property royalty due on that."
And HTC is just the beginning when it comes to royalty payments reports Business Insider -- Microsoft is looking for as much as $12.50 per device from other Android phone makers.