Microsoft Is Making An Astonishing $2 Billion Per Year From Android Patent Royalties
He estimates that the Android revenue has a 95% margin, so it's pretty much all profit.This money, says Sherlund, helps Microsoft hide the fact that its mobile and Xbox groups are burning serious cash.
That group always seemed to be profitable, but Sherlund says it's largely because of the Android money.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.
Sherlund believes Microsoft needs to spin out Xbox. He sees it as an orphan group at Microsoft that doesn't really fit with anything it's doing.Investors are blind to Xbox's struggles, says Sherlund, because they are "concealed by the hugely profitable Android royalties."
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