Google Earns $2 Per Handset; Apple, $575

Hugh Pickens writes "While Apple generates more than $575 in profit for every iOS device, and according to estimates in 2007 Apple earned more than $800 on every iPhone sold through ATT, Horace Dediu reports that Android generated less than $550m in revenues for Google between 2008 and the end of 2011, earning only $1.70 per year, per Android device — explaining how Apple is sucking up two thirds of the profit in the mobile phone business. Dediu's starting point is a settlement offer Google made to Oracle of $2.8 million and 0.515% of Android revenues on an ongoing basis. His assumption is that those numbers represent Google's revenue from Android to date. 'If this is the case,' writes Dediu, 'We have a significant breakthrough in understanding the economics of Android and the overall mobile platform strategy of Google.' Of course profitability is not the only reason Google is in the mobile phone business. 'P&L considerations were not the only (or even at all) factors in investment for Google. Having a hedge against hegemony of potential rivals, having a means to learn and develop new business and having a role in defining the post-PC computing paradigm are all probably bigger considerations than profitability,' writes Dediu. 'My take is that [Android] is not a bad business. But it's also not a great one.'"

Comments

So much for the importance of "market share"

[rainer_d]

Google just needs its licensees to sell.... about 288 times as much Android phones combined as Apple sells iPhones and bingo: profit ;-)

According to wikipedia, Apple sold 72 300 000 iPhones in 2011.

That leaves two possibilities for now:

1. Sell Android devices also to other species (rodents for example)
2. Search for alien lifeforms to sell the devices to

Re:Ads included?

[Anonymous Coward]

Which is not exactly an apples to apples comparison.

Because this is an Apples to Androids comparison, ya insensitive clod!

Re:Still More Than Google Makes On Apple Devices

[Dodgy G33za]

Not just want a mini tablet experience - maybe their eyesight is such that they need a bigger screen.

Re:Ads included?

[OneAhead]

Wouldn't that make him or her an iDiot ?

- I'll get my coat.