Microsoft’s (MSFT) Windows Phone platform continues to struggle but its income from the smartphone industry is booming. How is this possible? Simple: patent royalties. Microsoft has a number of licensing deals in place with vendors that sell millions upon millions of Android smartphones each quarter, and those deals are paying off. According to estimates from analysts at Trefis, Microsoft’s patent royalties from Samsung (005930) and HTC (2498) alone totaled as much as $792 million in the second quarter, more than making up for the difficulties Windows Phone has had gaining traction. Trefis cites earlier reports in noting that HTC pays Microsoft $10 per Android device and Samsung, which sold as many as 52 million smartphones into distribution channels last quarter, reportedly pays between $12 and $13 per device. According to estimates from market research firm Canalys, just 5.1 million Windows Phones were shipped last quarter by all of Microsoft’s partners combined.
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