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Cost Of Android Handsets Set To Rise Due To Patent Taxes?

There are currently three companies looking to impose a levy or tax on Android smartphones and unfortunately, it seems likely that they will succeed, an outcome that may cause the price of Android handsets to rise in the near future.

Nokia, Microsoft and Oracle are the three entities that are currently exploring ways to tax Google Android's meteoric rise by forcing the company and its many partners to pay royalties.

Oracle (opens in new tab) goes as far as asking Google to share its advertising revenues, something that Google has firmly rejected until now, and may be asking for around $3.35 per smartphone.

With up to 400,000 activations per day, that is just short of 150 million Android devices per year on which that small but still significant sum can be levied; it tallies up to a whopping $500 million every year for Oracle alone.

Nokia's success in getting Apple to pay roughly $5 per iPhone sold coincides with an HTC/Microsoft agreement which sees the former paying the latter around $7 per Android device shipped.

Should all three companies manage to get Android vendors to shell out license fees, this could amount for around $15 per handset which may add a 33 per cent premium on the cost of sub-$50 entry level handsets produced by the likes of Huawei & ZTE; that's between four and five times the net revenue earnt by Google on each handset.

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website building and web hosting when DHTML and frames were en vogue and started writing about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium. Following an eight-year stint at ITProPortal.com where he discovered the joys of global tech-fests, Désiré now heads up TechRadar Pro. Previously he was a freelance technology journalist at Incisive Media, Breakthrough Publishing and Vnunet, and Business Magazine. He also launched and hosted the first Tech Radio Show on Radio Plus.