Unwired – In a few years, every Android device maker may have to pay an average $10 licensee fee to Apple, Microsoft, Nokia, RIM, HP and Oracle. That’s $60 per device only for the rights to put Android OS on it.
The actual situation is more complicated based on whether someone could pay one of the companies that already has enough cross-patent agreements. A manufacturer might be able to get enough coverage by paying one or two of the big patent holders once or twice.
Since Android exploded, Google already had 2 big opportunities to remedy it’s patent problem. It could have bought Palm last year for something like $1.5 billion. Which would have got them patent portfolio of the smartphone industry pioneer, IP cross-licensing deals with most of the old players, in addition to all WebOS assets and team.
Last week, they could have had 6000 patent strong Nortel portfolio for something upwards of 4.5B. Which sounds pricey, but would have netted to about $25 per Android device for 1 year of production at current 500K a day rate. Accounting for future growth, spreading it over a few more years, this cost per device would have become negligible, easily covered by advertising and other revenue streams Google can generate via Android. But Google let both of these tremendous opportunities slip through it’s fingers.