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Making money: patents and phones
Aug. 15th, 2011 08:47 pmAlthough these two articles ended up being some time apart, I planned them to work together to explore just what's going on with the money side of the smartphone world. The mobile carriers are hugely profitable: several years back I worked out that in the UK they contribute as much to GDP as the oil and gas industry (for the UK that includes BP so it's not small, depending on the side issue of tax regimes - which applies equally to Vodafone) and as an ex-Ofcom analyst mentioned to me recently, they expect that to keep the political discussions away from them. Hah.
The handset makers make money: at least some of the time - Motorola has been posting a loss for a while (digression: has anyone considered that Google could be buying debt the way RIM did with the Nortel patents?) - but Apple's profits dwarf everyone else. Google makes money - a billion a year from mobile ads. Qualcomm is practically minting money, with fees on every phone for CDMA chipsets; the GSMA is at least distributing those fees between a variety of companies.
And then there's the whole OS situation: Android is free (as in puppy, I always say), Windows Phone has a licence, Symbian can't give itself away, BlackBerry is proprietary, Bada is coming up on the inside straight. Microsoft has patents (but has only ever started seven patent lawsuits), Nokia has patents and sues freely, Apple has patents but is getting sued as well as suing - and the Google situation is like a catherine wheel of implications sparking off in all directions.
So I was delighted to get two articles to really get my teeth into the situation - and to be reminded that putting a figure on any of this is impossibly hard because it's nearly all commercially confidential and the fees vary depending on who has what in their hand.
Microsoft's Patent Masterplan http://www.techradar.com/news/computing/how-microsoft-makes-money-from-android-986672
Who makes money from mobile phones? http://www.techradar.com/news/phone-and-communications/mobile-phones/who-s-making-money-from-your-smartphone--992247
The handset makers make money: at least some of the time - Motorola has been posting a loss for a while (digression: has anyone considered that Google could be buying debt the way RIM did with the Nortel patents?) - but Apple's profits dwarf everyone else. Google makes money - a billion a year from mobile ads. Qualcomm is practically minting money, with fees on every phone for CDMA chipsets; the GSMA is at least distributing those fees between a variety of companies.
And then there's the whole OS situation: Android is free (as in puppy, I always say), Windows Phone has a licence, Symbian can't give itself away, BlackBerry is proprietary, Bada is coming up on the inside straight. Microsoft has patents (but has only ever started seven patent lawsuits), Nokia has patents and sues freely, Apple has patents but is getting sued as well as suing - and the Google situation is like a catherine wheel of implications sparking off in all directions.
So I was delighted to get two articles to really get my teeth into the situation - and to be reminded that putting a figure on any of this is impossibly hard because it's nearly all commercially confidential and the fees vary depending on who has what in their hand.
Microsoft's Patent Masterplan http://www.techradar.com/news/computing/how-microsoft-makes-money-from-android-986672
Who makes money from mobile phones? http://www.techradar.com/news/phone-and-communications/mobile-phones/who-s-making-money-from-your-smartphone--992247
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