Microsoft makes $2 billion a year from Android

Google have to pay Microsoft a fee for every Android handset because of Microsoft patents used in the OS. The total revenue from that isn’t known, but Nomura analyst Rick Sherlund has done some calculations and reckons that a massive $2 billion per year comes into the company from Android patent royalties.

Rick also estimates that this revenue has a 95% margin, so mostly all profit. Figures detailed in the Entertainment and Devices revenue statement (which includes Xbox and Windows Phone too) showed that the group was always profitable, but if you remove the included $2 billion revenue from Android it leaves a loss of $2.5 billion on Skype, Windows Phone and Xbox.

Effectively, based on these numbers, Microsoft is using the patent cash to hide the huge losses in their mobile and Xbox groups.