It's no secret that Microsoft's Windows Phone 7 operating system has gotten off to a slow start. Microsoft CEO Steve Ballmer has said that the smartphone operating system came to market about a year too late; hence it's facing stiff competition from seasoned competitors like Apple's iOS and Google's Android.

Currently, Windows Phone 7 is treading water with a 1.6 percent share in the global smartphone sector during Q1 2011 according to Gartner. To say that Windows Phone 7 isn't adding much to Microsoft's bottom line would be putting it mildy at this point; at least not until its partnership with Nokia kicks into full gear.

Keeping this information in mind, a Citi analyst reports that HTC is currently paying Microsoft $5 for every smartphone that it sells running Google's Android OS. The payments are a result of a patent settlement that Microsoft reached with HTC.

Horace Dediu of asymco took things a step further and reckons that HTC has shipped around 30 million Android-based smartphones. With royalty payments of $5 per device going to Microsoft, the boys from Redmond have received around $150 million thanks to sales of Android smartphones.

Microsoft claims that it has sold two million Windows Phone 7 licenses -- Dediu estimates $15 per license -- which would bring revenues from its latest smartphone operating system to $30 million. If these numbers are accurate, Microsoft is currently receiving five times as much money from Android than it is from its own smartphone OS. 

As Ballmer stated back in March 2010, there are plenty of costs involved for manufacturers when it comes to putting Android OS on smartphones.  "There's nothing free about Android," said Ballmer. "I mean at the end of the day as we certainly have asserted in a number of cases you know there's an intellectual property royalty due on that."

And HTC is just the beginning when it comes to royalty payments reports Business Insider-- Microsoft is looking for as much as $12.50 per device from other Android phone makers.

http://www.dailytech.com/Reports+Microsoft+Pulling+in+More+Cash+Courtesy+of+Android+Than+Windows+Phone+7/article21752.htm

Incredible!

However, I wonder what settlements are causing them to profit from just about every Android device sold.

i'd love if they release WP7 games on the android market, or just give a sign that the Windows Phone OS is staying by making new phones, and not going to disappear fast like the Zune did.

And that's how you diversify correctly :P 

well it doesnt help that WP7 arent very good phones, at least according to cnet.com

i have never used one so i can only go by a very very reliable source in cnet.com.

but that is quite funny. i wonder if 

WP7 will go the way of the kin, i just dont see there being enough room in the market for a 4th or 5th major smartphone OS

if you havent got one then you cant comment. I can bring a fair few sites saying it is a good phone. I love these so called reviews of a system somebody hasn't used...

i can still comment, why couldnt I.

i also didnt review, cnet.com did. so what exactly are you talking about, and why are you so defensive.

wp7 aint going nowhere. they have a massive update coming to all phones called mango which will make their phones on par with the competition, and they are already pretty good. add the fact they have nokia in their back pocket and have 10 new phones coming out this fall...ms is investing massively in to mobile.

2013 phone maket share should be

1 android 2 ios 3 wp7

did you forget rim. thats not going any where. rim will be number 3.

And even if WP7 is 3rd/4th, it still will have a very low marketshare compared to others, as I doubt a simple update just to be on par with its competitors will bring in a crap load of customers.  Andriod and iPhone have just become too popular for that.

@thismeintiel

And the Android and iPhone devices came from where to these fabled heights?

I have the Samsung Omnia 7 and I ditched my HTC desire for it. The Android was a good phone but the simple OS on the WP7 won me over but for the same reason many others would not like the lack of configuration. This phone has done very well in reviews.

The next update is very significant for two reasons.

Reason 1 the update itself I will not go into details but it is a seriously large update offering many featues.

Reason 2 its ties in with Nokia and other manufacturers releasing lots of phones.

I am not expecting WP7 to dominate the world but Rim certainly is at risk. The figure of 1.6 is a little misleading because it actually shows a drop for Microsoft which is mainly down to the end of Windows mobile phones being replaced with WP7 and WP7 not being a direct replacement as they are missing many enterprise and enthusiasts features. Also the 2 million figure is pretty old Microsoft have not made any announcements about devices sales since.