Microsoft’s profit from the smartphone industry should be coming from the Windows Phone platform, or so we thought. Business Insider has obtained information from Nomura analyst Rick Sherlund, who claims that patent royalties on the Android market made by Microsoft brings a massive $2 Billion profit. An estimated 95% of of revenue is in Microsoft’s gain, which is nearly all of the profit earned from Microsoft’s patent royalties.
Sherlund also says that Microsoft is using this massive profit to cover up the loss that was made in the Xbox division to even out the estimated $2 Billion Microsoft loses every year from the Xbox. Although Microsoft’s entertainment division seems to be very profitable for the company, Sherlund claims that’s only due to the free profit made by Android. Microsoft is doing nothing about he Xbox struggle, claims Sherlund – they believe the Android royalties will cover everything up.