HTC pays Microsoft $5 for each Android phone it sells

Mobile phone makers HTC is paying Microsoft $5 for every handset it sells with the Google-owned Android operating system installed.

According to a report on Business Insider, a Citigroup analyst has released a report indicating the figure of $5 per handset is paid, owing to a patent settlement deal relating to an intellectual property infringement.

It has long been known that Microsoft has regarded Linux-based operating systems (such as Android) as infringing on its intellectual property. But it’s thought that the reason why Microsoft has pursued Android handset-makers rather than Google itself, is because it’s easier to do that than take on the might of Google. And also, it’s partly because it puts a price on a big rival platform that is otherwise free to use.

Indeed, back in October, Steve Ballmer noted that “Android has a patent fee. It’s not like it’s free.” But up until now, it wasn’t clear how much that patent fee amounted to.

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The report also reveals that Microsoft is actively pursuing other Android handset makers and it’s believed they’re seeking up to $12.50 in some cases.

Microsoft is just entering the tablet market now, and is pushing hard to gain traction in the smartphone market too. Longer term, if Microsoft continues to pursue Android and draw-in patent fees from other manufacturers, Android may no longer be a viable operating system for manufacturers to use. Microsoft has clearly thought about this long and hard.

It is quite bizarre that HTC is paying Microsoft to use Google’s operating system. And by default, HTC customers buying into the Android ethos are paying $5 into Microsoft’s coffers each time.