No, Windows Phone did not make $736 million for Microsoft in fiscal 2012

A report in Seeking Alpha has the Windows Phone community up on its chair crowing: according to the analysis, Windows Phone brought in revenues of $736 million in fiscal 2012.

The report goes on to estimate that in fiscal 2011, the figure was $756 million, and for fiscal 2010, Windows Phone made $581 million.

However, probably not. Here’s how Seeking Alpha arrived at its conclusion:

First, take a gut check on the figures: Does Windows Phone feel like a three-quarter of a billion dollar business? I’m not saying that Microsoft doesn’t spend that much on it, but does it bring in that much revenue? Your abdomen is right, the number is too high.

Here’s the thing: Microsoft doesn’t sell phones, meaning that its revenues from Windows Phone are thus derived in two ways: licencing fees paid by OEMs (which we don’t have numbers on), and its cut of sales from the Windows Phone Marketplace.

The last lines of the above chart I think belies how off the final, arrived figure is: When the total estimated revenue is totted up and compared to the total estimated units shipped that year, Microsoft makes either $137 per device, or $60.

That swing alone should make you fret. Even more, if Microsoft makes so much per device, why did its total revenue for Windows Phone decline when it sold more than twice as many units? Unless, naturally, there’s an error in the above, and Microsoft makes nothing close to that kind of money both per phone, and in aggregate from Windows Phone.

However, the total revenue per device is also ludicrous. No OEM can afford to pay that much per phone, and Windows Phone users don’t buy enough apps to generate enough fees cover the revenue gap.

Brad Sams of NeoWin, and friend of TNW, has another fine point on why the figures summed above are bunk: “[I]f they had 700+ mill in revenue from their phone division, they would promote the fuck out of they to show they [didn’t] screw up.” Yes, indeed.

So, what is going on here? The easy answer is that we don’t know. Microsoft only releases so granular a breakdown of the sources of its revenues. That allows for analysis like the one above, but not much accuracy as we have seen. What other source of revenue could be accidentally inflating the Windows Phone tab? Your guess is as good as mine, it could be royalties from Android OEMs for all we know.

However, it just doesn’t check out that Windows Phone is making the revenue figures that are listed.

Top Image Credit: Vernon Chan