...claims analyst, with absolutely nothing backing up their claim. The headline appears as if Microsoft accountants stated this as a fact, when in reality this is someone essentially reading tea leaves.
Further it's worth noting that the division that these Android royalties are attributed to also garners all other patent licensing royalties of any sort (e.g. FAT), as well as licensing charges such as ActiveSync licensing (ergo, every iPhone, among others).
Exactly. Rick Sherlund has a history of saying that Microsoft should be divided up, and Xbox should definitely be spun off [1, 2, 3]. He even said Samsung should take over Xbox division [4].
Even if MS earns $1 Billion from patents that exclude "legitimate" licensing, I think that would be a big number and definitely should be looked into.
Microsoft's divisions (most notably Xbox) have always had a huge dilemma: Do we act in a way that's best for our division, or do we maximize value for MSFT. From my time at Xbox, I can say with certainty that the implied actions for each choice are often not the same.
I think (and a lot of other would agree with me on this) that the Xbox division within Microsoft is the most customer-centric of any company in the entire world.
The people at Xbox are die hard gamers who really want to help you solve your problem whatever it might be. I don't know if spinning off one of the best divisions would be such a smart division specially when it is already profitable, unlike Bing.
Sherlund says that if you back out the Android profits, Microsoft is probably losing $2.5 billion on Skype, Xbox, and Windows Phone. Of that, $2 billion in losses are attributable to the Xbox platform.
He appears to be saying that the Xbox platform loses $2 billion per year. Everything I've read says that the Xbox has been profitable every year since 2008.
The only reason Xbox was 'profitable' was due to an accounting trick.
The Ultimate SKU of Windows commanded a premium license fee due to the inclusion of Windows Media Center, created by the eHome division. eHome, from an accounting perspective was part of IEB, the group that had the Xbox P&L.
I don't remember the exact license fees but Windows Vista Home was something like $30 and Windows Vista Ultimate was $75 to OEMs. That means for every copy of the Ultimate MS sold about $45 of revenue went to IEB from Windows.
When we envisioned eHome and Media Center we thought we were going to revolutionize the living room. Instead we ended up building a feature in Windows MS could charge more for.
Further it's worth noting that the division that these Android royalties are attributed to also garners all other patent licensing royalties of any sort (e.g. FAT), as well as licensing charges such as ActiveSync licensing (ergo, every iPhone, among others).