What does Android mean to Microsoft & Google?

Yesterday there was a report by Goldman Sachs which pointed out that Microsoft stands to make $3-$6 per Android device sold. That's well below the numbers we have been hearing so far, which quoted the patents use royalty amount to be around $15. So how much does Google earn throughout the lifetime of an Andoid device. I got that answer on Quora.

How much does Google earn throughout the lifetime of an Android device?

Piper Jaffray's Gene Munster estimated that Google made $5.90 per Android user in 2010. Assume the average user replaces his/her Android every 21 months (standard cell phone replacement rate in the U.S.), and that would translate into $10.32 per user over the lifetime of the phone. Of course, if the phone then finds its way to another user, that adds to its lifetime value.

Munster also predicted that Google could generate $9.85 per Android user in 2012, or $17.24 over 21 months. This number is also close to Eric Schmidt's goal of generating $10 per Android user per year (with a billion users). But forecasts like these rarely prove completely accurate.

With a run rate of 500K Android activations, Microsoft stands to make 500K x $4.5 (average royalty amount) x 30 days x 12months = $810M. Goldman Sachs puts this number as $444 million considering the fact not all Android OEMs (most notably Motorola) have the royalty paying arrangement with Microsoft. 

Google will stand to make $9.85 x 500K activations x 30 days x 12months = $1.7Billion per year. Considering standard cell phone replacement rate in the U.S. of 21 days, the amount is $17.24 per Android user and this comes to $17.24 x 500K activations x 30 days x 12months = $3.1Billion over the lifetime of an Android device. 

So what's the difference between Google and Microsoft. One big difference is that while nobody can eat into Microsoft's pie, Google is vulnerable to the newer OEMs like Amazon. The money that Google makes from Android is the money from Apps download, Google Search use and Ad views and clicks on these devices. Amazon if successful with Kindle Fire has its own App store, its own Mobile browser and I am sure somewhere they are building Mobile ads serving engine and with a strong alternative in Bing, Google can lose quite a bit of share to Amazon.