Google gave a testimony to Congress last year claiming it earned two-thirds of its mobile revenue from iOS devices, but now it seems as though the company’s estimate might have been low.
Google made less than $550 million in revenues for Android between 2008 and 2011, while making four times as much revenue during the same period with Apple products that employ Google services like Search and Maps.
According to The Guardian, the settlement offer provided yesterday by Google to Oracle depicted Android’s revenue streams. Settlement discussions ordered by Judge William Alsup were derailed when Oracle rejected Google’s low offer to pay royalties on Android if alleged patent infringements deem true in court.
Reuters reported yesterday that the settlement stems from a 2010 lawsuit where Oracle claimed its Java-related patents were infringed by Android. Oracle acquired the intellectual property in question when it purchased Sun Microsystems in 2010.
The pre-trial settlement offer consisted of $2.8 million in damages for 2011, a future 0.5-percent royalty of Android revenue based on a patent set to expire in nine months, and another 0.015-percent royalty for a patent that expires in April 2018. The number of patents in the suit is down to just two, but Oracle is holding out for a possible injunction.
The Guardian noted that court documents do not actually detail Android’s revenue. However, the key figure is advertising revenue. The publication further explained:
Google also gets a 30% cut from app sales to Android devices. Google said the damages figures matched what had been calculated by a court-appointed expert. The offer does not mean Google accepts that it has infringed the patents claimed by Oracle. The $2.8m offer, at a combined rate of 0.515%, suggests that Android’s total revenue from the launch of handsets at the end of 2008 through to the end of 2011 was $543m. That also means that Android could generate more than $1bn in advertising revenues this year; last year, Google’s total annual revenues were around $38bn.
The Android operating system is free for manufacturers to use in devices, but they must achieve certification by including Google services like Search, Maps, or YouTube. Google then earns advertising revenue through these packaged services.
Chief Executive Officer Larry Page posted his opening remarks on Google+ for the October 2011 earnings call, where he said Google saw a huge positive revenue impact from mobile that grew “2.5 times in the last 12 months to a run rate of over $2.5 billion.” The important aspect to realize is that this figure represents more than just Android revenue.
Apple’s iOS devices have carried Google Maps and Search since the iPhone’s 2007 birth. Apple sold 315 million iOS devices during that time. Meanwhile, approximately 850,000 Android devices are activated each day with Google earning roughly $10 per handset each year. The math, coupled with Page’s comments, equate to Google pulling in more advertising revenue from iOS devices than Android devices.
Google and Oracle’s trial is due to start April 16.
This article is cross-posted on 9to5Google.
- Oracle rejects Google’s offer to pay royalty on Android as too low (9to5google.com)
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