Microsoft makes a killing out of Android

Microsoft is apparently making a huge chunk of cash thanks to Google’s Android, and makes more from the operating system than it does from its own Windows Mobile 7.

The surprising detail comes from Citi analyst Walter Pritchard, who has penned a report on Volish doings.

He found that Redmond makes five times more income from Android than from Windows Phone thanks to a deal it did with HTC.

In April last year, Vole settled an intellectual property infringement case against HTC. Under the deal HTC agreed to pay the shy and retiring Microsoft CEO Steve “there’s a kind of hush” Ballmer $5 per shipped Android set if he would stop talking to them about it.

HTC has sold 30 million Andriod sets, which have meant that Steve could have added $150 million to his Christmas club.

At the same time, Steve only sold two million Windows Phone licenses, which accounts for $30 million dollars using an estimated license fee of $15 for each phone. This is a fifth of what he got out of Android.

Microsoft has sued other Android phone makers and might get some cash from them too. And if HTC coughed up, it is fairly likely that the other handset makers will want to stop Steve snuffling around. Because they did not surrender quickly, it is possible that Vole could collect $7.50 to $12.50 per handset sold.

So when you hear that Android is winning the smart phone race, you should realise that Steve Ballmer is laughing all the way to the bank. If Windows Phone 7 Mango takes off with this Nokia deal that Steve has jacked up, Microsoft could be the biggest beneficiary from mobile after all.