Microsoft making hay from Apple attack on Android

March 9, 2010 | By Surur

Oppenheimer analyst Yair Reiner reports that Microsoft has been quick to take advantage of Apple’s attack on the open source Android operating system.

Yair, who has performed some industry checks, report that the Apple suite has had an extremely disruptive effect on handset development in the mobile industry.

"Our checks also suggest that these warning shots are meaningfully disrupting the development roadmaps for would-be iPhone killers. Rival software and hardware teams are going back to the drawing board to look for work-arounds. Lawyers are redoubling efforts to gauge potential defensive and offensive responses. And strategy teams are working to chart OS strategies that are better hedged."

"Until recently, most high-end smartphone programs were focused primarily on trying to match the iPhone’s user experience, and secondarily on avoiding any egregious violations of Apple’s patents.

"We believe this order of priorities has temporarily changed — along with the industry’s appreciation for how far Apple is willing to extend the fight. Few OEMs believe that simply staying clear of multi-touch can, on its own, avert Apple’s wrath. We believe a lot of software and hardware is being sent back to engineering departments for work-arounds.

"It’s too early to know how Apple’s legal action against HTC will ultimately play out, or whether Apple will have the appetite to launch additional battles with other OEMs. But in the near term, Apple’s legal actions appear to have temporarily left competitors playing catch-up with their shoelaces tied."

Reiner reports that even before the lawsuit, handset makers were having second thoughts about Google, following the release of the Nexus One, when Google became a direct competitor. Now their faith in Android as the easiest and cheapest way to counter the iPhone has been shaken, says Reiner. The unintended consequence, he suggests, is to send them into the arms of Microsoft (MSFT) and Win7 Mobile.

"Our checks," writes Reiner, "indicate that Microsoft has been quick to sniff out this burgeoning opportunity and has begun to aggressively promote the strength of its own IP portfolio, as well as its willingness to join battle with customers that come under IP attack."

Microsoft provides IP protection that includes the defence of OEMs and distributors against IP claims in every country Microsoft distributes or markets its Windows Embedded and Windows Mobile products; protection of patent, copyright, trademark and trade secret claims based on that software; and the removal of the monetary cap related to defence costs. This means an OEM who directly implements Windows Phone 7 without much modification (about the only way to implement Windows Phone 7) should never suffer any loss related to patents on the software itself, unlike HTC, who is currently facing having half of its shipments banned by the fast-moving ITC, and eventually massive fines by the US federal courts.

In 2006 Jason Stolarczyk, marketing manager for Microsofts Windows Mobile and Embedded group said:

"I think of a device maker building a device with software that is not indemnified is like building a boat without life preservers," "This is an extra level of insurance from us for folks to feel confident in building devices that meet the requirements of their customers." "They were now being offered the assurance that there is a single point of responsibility, and that is Microsoft,"

Rob Enderle, the principal analyst for the Enderle Group, said that Microsoft’s indemnification was one of the most comprehensive in the market and set a high bar for competing platforms.

"Intellectual Property litigation has been increasing steadily for the last several years. As a result, indemnification against this litigation not only has become a requirement for any technology purchase, it strongly pushes companies towards the buy side of the build versus buy decision," he said.

About Surur

Site Admin and Windows Phone enthusiast, he has been using Windows Mobile devices since before they were called PocketPC’s. He is currently sporting a HTC 7 Trophy.

Tagged adroid, apple, google, htc, iphone, software, windows phone 7

Johnny

And that's why I will be buying a windows 7 phone

NuShrike

Still buying nothing than something that can be sued … lol

http://twitter.com/Arktronic @Arktronic

What?! How the hell did you go from a discussion of Android- and HTC-specific features being assaulted by Apple, to a full anti-open source argument?

admin

Because if HTC was paying for Android, they may very well have bought some indemnity with the OS. Free often means free to fail also, without any come back.
http://intensedebate.com/people/Lennard Lennard

paying for windows mobile, is also paying for protection. HTC and other OEMs got no protection from google because android is free to use, but not free from patent infringements. HTC is in the gutters with this one…they got lured in by "free software", now they're going to have to pay for using "free software".
oh, the irony.

http://twitter.com/Arktronic @Arktronic

I'm not entirely sure why, but that sounds extremely cheap and dishonest to me. Maybe it's the "paying for protection" part that sounds… mafia-like.

GP007

In the case of open source, for the most part, there is a risk, it'd be like finding a free option to use for your device online, sure it'll work, and sure it won't cost you a thing, but there is always that chance that someone who does own a patented version of said system can sue you if they feel like it.

It's not just software, I mean the same idea works in anything out there. Open source also isn't free really, HTC while using android has to spend extra on R&D to get it working, while if you just buy wp7s from MS the license fee also gives you direct support from MS and help. MS also does most of the complicated work for you (even more so now with them taking more control of WP7s when it comes to drivers and stuff).

People here "free" and think, yay, but while that's fine for personal use at home, when you work with it for business, it's not free at all. How do people think linux venders like Red Hat make money?
http://intensedebate.com/people/Lennard Lennard

hmm, it seems you're miss understanding what's going on…try to go back over the whole situation and then maybe then my comment above would make more sense to you.

check this analogy of the situation:
you're in the business to buy yourself a brand new car, you go to a car salesman from M-Car Lots, and they giving damage, wear-and-tear and accident protections so if anything happens to the car or you while you are in it they will take care of it no problem.

however, G-Car Lots is giving away free cars! but what you see is what you get, so if anything happens to the car whether you're in it or not is your problem, so if you dive out the parking lot and heading down a hill and the brakes fail….then that's your problem whatever happens.

Thats the difference for OEMs in using Microsoft's OSs and "Free" OSs.
In this case "Free" is not really "Free" because they're being sued, and who's going to have to foot the bill? they are, not the person they got the "Free" stuff from…they have to pay Lawyers and quite possibly Apple a huge sum of money

http://twitter.com/chmun77 @chmun77

well said!

And that's why i ditched my HTC Hero and using HD2 now….. more supports and when the hell is Hero going to be updated to ver 2.1??! I guess the answer is NEVER….. LOL

Anyway, WP7, here I come!!

http://www.twitter.com/cris_bwma CrisRowlands

I personally find it intriguing how apple dont really respond to HTC having things similar in design and content to their own products until they start being a big contender in the mobile world.

Feeling threatened are we apple?

GP007

Well, actually, if anything I'd think in the US apple would feel more threatended by Motorola with it's droid than with HTC. But one target is as good as any since they share the same OS. iPhone sales haven't really seen a hit per se since android you know. That's probably because the smartphone market as a whole is growing and not static so they're not really fighting for the same pool of users yet.

efjay

The article linked is quite an interesting read, with apple supposedly in talks with handset makers about possible patent issues, if true there may be some trouble ahead for android. However even WP7S may not be immune to an apple lawsuit in the future so lets hope HTC/google manage to get most if not all apple's patent declared void due to prior art.

http://intensedebate.com/people/Lennard Lennard

Microsoft got themselves a whole slue of patents when it comes on to mobile, they have their own multitouch patents, they quite possibly have patents on software keyboards.
and even if we go by what you say, it won't be the OEMs who get sued it would be Microsoft so unlike this android issue, with Microsoft, OEMs are safe.

NuShrike

The elephant in the room is where is Palm in all of this? They predate all and should have some patent portfolio here.

http://intensedebate.com/people/Lennard Lennard

yes palm does and I guess thats why they haven't been sued yet. however, I'm not sure how they got multi-touch in, maybe they licensed it from Microsoft or apple.
guest

And let's not forget that there are two other ancient giants and pioneers in the mobile industry in Nokia and Sony Ericsson. Nokia has already started their charge against Apple, SE is a quiet mouse atm, but considering how long they have been in the industry they are bound to sit on some good patents aswell.

GP007

This thing is going to last long, not one or even two years. We're talking 20 patents and they get reviewed case by case, and each one takes like 6 months at best to get a review by the patent office. There is no quick solution for this. HTC will keep selling phones I bet, unless Apple can get them to stop, but I dunno. In the end the biggest thing is that Apple wins the OEM PR prize. Even if the patents are valid or invalid, if OEMs are scared about being next after HTC then it's a good blow to Android as a platform.

Ken Jackson

@efjay, I think the problem with Android is that Google doesn't have much in the way of IP that threatens Apple. Apple doesn't have a search engine. And really not much in the way of email either.

Microsoft OTOH can combat with Office patents (shutdown the whole iWorks suite), OS patents (block OS X from shipping), smart phone patents that predate anyone else (block iPhone from shipping), and tablet PC patents (block iPad from seeing the light of day). Not to mention the fact that MS also has keyboard, mouse, developer tools, and other various types of patents.

It would be one thing if Apple had a very specific qualm with MS. But if they effectively were trying to kill Windows Phone, MS would go nuclear on Apple. I think both companies would prefer their fate decided with the consumer not in the court. But I think Apple believes that it can take down Android w/o Google able to do much in the courts against them.
http://www.facebook.com/olivier.dassonville Olivier Dassonville

Apple is the new Emperor of the Dark Side. It is interesting that wrestling match at 4: In the ring, there are Apple and HTC and ready to jump into the arena, MS and Google!

http://intensedebate.com/people/Lennard Lennard

of the 20 patents, only one is geared towards windows phones made by HTC. however, that one patents is not software based (not a Microsoft problem) so there is really no great need for Microsoft to jump in the fight.

HG23

Personally, I think Google should pull Maps, Search, and everything else from all Apple products (Adobe should pull Acrobat support as well since Apple seem bent on excluding Flash in EVERYTHING) or sue them for using it.

Apple makes great products but they have a terrible way of doing business. From the inconsistencies in the app approval/rejection process, to suing or bad-mouthing companies whose products they use…I hope other companies are watching all of this and think twice before partnering with Apple in the future.

http://intensedebate.com/people/Lennard Lennard

if google pulls maps and search, then Apple is going to do with Microsoft bing maps and search, so apple loses nothing here only google lose. also I think by doing that google would open themselves to monopolistic prosecution

http://twitter.com/rajeshvuta @rajeshvuta

I don't think Apple will make the mistake of going against Microsoft regarding Win Phone 7 just like they did with Android and HTC. Microsoft will come heavily on them if they did. MS has a warchest of patents

http://intensedebate.com/people/Lennard Lennard

a "warchest" you say? I think Microsoft has the SPARTA of patents.
IBM got the most patents issued last year, but Microsoft got the most in software
GP007

Apple already tried to sue MS years ago over OS UI and iirc lost. They have a deal going that each other won't sue over UI now. But if that is over just the desktop or if it extends to mobile and such I dunno. But it is why each other copies the other on UI with Windows and OSX and nothing ever happens.

http://intensedebate.com/people/Lennard Lennard

lol, wicked Ballmer pic, reminds of of Omg Bak

http://www.appatic.com Avatar X

It is from another Tony Jaa movie, so you are half right. and it is ong bak not omg.

motty69

I just hope this ends up in front of a judge with half a brain. At least half of the patents in question are very vauge. I'm betting HTC has some of their own patents to throw in front of the judge too. Thanks to the homebrew communities this has no change of killing Android, but it could slow it's development so much that it will be behind the curve and without a growing apps marketplace.
Paul

1) HTC didn't have much choice but to embrace Andriod. MS's repeated screwups and delays made sticking to a WinMo-only strategy suicidal.
2) Google probably isn't obligated to indemnify HTC, but probably will if this is having the chilling effect on the broader ecosystem sited in the article.
3) I have to laugh at the other writer's use of Apple and multitouch as if they're synonymous, or that the company somehow invented/owns it.

http://intensedebate.com/people/Lennard Lennard

Microsoft owns a version of Multi-touch, apple does too, I'm not sure if Palm does or if they licensed it from another company. but apple clearly doesn't own it…per say..

http://www.appatic.com Avatar X

Yet you are wrong Paul, the R&D HTC spent on Android and supporting Android with the very first two phones ended up costing them money and loss of revenue. Now it even got them sued.

HTC ended up not only not winning anything but getting their image dragged into the mud by Apple. Talk about a bad return from trying something different. WM HTC devices were doing very well and are still doing very well. Not so much for the Android ones as they initially thought.
guest

But let's not forget the rumors that Apples patent on multi-touch is extremely weak, and that if Apple ever does try to go after someone for implementing multi-touch they'll probably loose that patent. I think that is why Apple isn't including multi-touch in this patent-attack, they are simply too scared.

Paul

Typo. sited > cited.
Who?

Another example of analysts (and those that simply blindly copy and paste articles) are idiots. The patents at issue in the Apple/HTC suit have NOTHING TO DO WITH MULTI-TOUCH.
iphonekiller

i agree with HG23. what will the iphone be without apps.
John

Few month ago I posted comment about HTC Phones with Android OS and how this will hurt HTC at some point and why they should stay away from Android and continue with Windows Mobile like before.

And now this law suit against them from Apple because of Android. I don't think Apple can win this because their law suit is just plain stupid. They can't sue Google because they don't have power to do it so they went with HTC instead. They are just crying losers because they know they are behind everybody else and they don't have anything other than thier old outdated iPhone to offer.

But still this shows I was right about Android phones and this actually hurts HTC somehow. Spend some money for legal stuff, fees, etc. instead of spending them for new innovations and phones.

I just wish they didn't go with Google Android. They built quality Windows Mobile phones for many years and specially recently all their phones collection are awesome.

They didn't need Android at all but they did this mistake anyway…