Microsoft (NASDAQ:MSFT) reported that revenues from its Windows Phone smartphone operating system rose to $222 million during the second quarter--though the company attributed that figure to both "patent licensing revenue and sales of Windows Phone licenses."
To put that in context, Microsoft reported total company quarterly revenue of $19.90 billion and earnings of $4.97 billion.
The software giant derives a great deal of mobile revenue from licensing its patents, especially to companies using Google's (NASDAQ:GOOG) Android platform. In April, Microsoft got Hon Hai, parent of electronics manufacturing giant Foxconn, to agree to license Microsoft's patents for devices running Android and Chrome OS. Microsoft has struck similar deals in recent years with the likes of Acer, HTC, LG Electronics and Samsung Electronics, as well as with smaller firms and ODMs including Pegatron, Quanta Computer, Winstron and others. Notably, Google's Motorola Mobility unit as not inked a patent licensing deal with Microsoft, and the two have clashed repeatedly in court over patent infringement.
Microsoft declined to comment further or provide any additional breakdown on the Windows Phone numbers, according to AllThingsD. Since most research firms have not reported on smartphone market share for the second quarter, it's difficult to say how Windows Phone fared in the market in the period. Nokia (NYSE:NOK), Microsoft's largest Windows Phone partner, reported shipping 7.4 million Lumia Windows Phones in the quarter, its highest ever for a single quarter.
"Subscriber additions to Skype and Xbox Live, plus strong growth in Windows Phone royalties helped Microsoft grow its Online Services Division (OSD) and Entertainment and Devices Division (EDD) revenue from 2Q12," TBR analyst Jessica Paterson wrote in a research note. "The company's organizational realignment will allow for better integration of major platforms across Microsoft's portfolio, including better integration of Skype and Bing with Windows Phone and Xbox."
However, Microsoft missed analysts' revenue and profit expectations for the second quarter. Further, Microsoft booked a $900 million charge related to" inventory adjustments" for its Surface RT Windows 8 tablet. Microsoft recently cut the cost of all its Surface RT devices by $150.
- see this release
- see this AllThingsD article
- see this WSJ article (sub. req.)
- see this The Verge article
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