Report: Google Makes $10 Per Android User Per Year

An analysis performed by UK publication The Guardian on court documents filed in the patent litigation between Google and Oracle suggests that Google has made less on Android handsets than from the iPhone. The court documents are part of a settlement proposal filed in the case. There’s no overt discussion of revenues in the documents. Instead there are some potential damages figures from which The Guardian has extrapolated Google revenue numbers.

NOTE: See our own follow-up analysis, No, Google Doesn’t Make Four Times More Off The iPhone Vs. Android

The publication reports “Android generated less than $550m in revenues for Google between 2008 and the end of 2011.” It further derived an average revenue per Android handset per year figure of $10.

Interestingly this is a figure that Eric Schmidt estimated Google could make off each Android user. In 2010, then CEO Eric Schmidt speculated that Android would become a $10 billion revenue stream if a billion users generated $10 per year for Google. And in early 2011 Piper Jaffray analyst Gene Munster estimated that Android was generating about $5.90 per user for Google and saw that figure growing to $9.85 in 2012.

The Guardian also estimated that Google made roughly $30 per year, per PC with a couple of caveats.

Earlier this month Macquarie Capital estimated that in 2011 Google made just over $1.3 billion in paid search revenue from its default position on iOS devices. Apparently Google gave the lion’s share of that back to Apple under the terms of a default search agreement between the two companies.

In other words, Google made more (top-line) revenue in one year from the iPhone than it did in three years from Android handsets.

If Google activates 800,000 Android devices daily it would mean 292 million devices activated per year. Using the $10 per user, per year revenue formula that would translate into $2.92 billion in global Android revenue over the course of a hypothetical year.

Below is a Google mobile revenues forecast from Cowen and Company. It shows $5.8 billion in revenue this year.

Mobile is becoming an increasingly strategic part of Google’s business and one of the places where the greatest growth is occurring.

Postscript: Upon closer inspection of the settlement document that apparently forms the basis for The Guardian’s analysis, it’s very difficult to verify the accuracy of the claims and estimates above. The numbers may therefore be highly untrustworthy. See our own follow-up analysis, No, Google Doesn’t Make Four Times More Off The iPhone Vs. Android.

Related Entries

  • Google Will Make $10 Per Android User In 2012: Report
  • US Subpoenas Apple For Details About Default iOS Google Search Deal
  • Report: 25 Percent Of Paid-Search Clicks Will Come From Mobile By December

Related Topics: Featured | Google: Android | Google: Business Issues | Google: Legal | Google: Mobile


About The Author: is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling.

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