With Apple and Microsoft making the rounds of recent patent litigation news on the mobile front, the cost and risks of licensing and using the Android operating system on devices may be prohibitively high for manufacturers, presenting a rare opportunity for Microsoft to make a comeback in the tablet category, a mobile computing space that it had helped to create with the tablet PC era nearly a decade ago.
Microsoft itself had been pursuing smartphone manufacturers in the past–including those that jointly license Windows Phone 7 alongside the Android platform–to cough up licensing fees on technologies and core patents that Android infringes upon. It is speculated that long-time Windows Mobile partner HTC may pay Microsoft around $5 per Android device sold and that Microsoft may be asking Samsung for as high as $15 per device.
Microsoft however isn’t the only one trying to capitalize on the popularity of the Android platform. Rival Apple has also gone after several prominent Android manufacturers, including Samsung, HTC, and Motorola with their iconic Galaxy, EVO, and Droid brands in the U.S. over core Android technologies that are said to be infringing on Apple’s iOS platform. It’s unclear what the costs of licensing those technologies would be for various manufacturers, but the case against HTC may have the broadest implications on the Android ecosystem as whole. While Apple’s case against Samsung deals more with the device’s overall look, TouchWiz’s styling cues, and the packaging of the Galaxy smartphones and tablets, the case against HTC involves core Android technologies, such as the way that contact information is contextually linked. As such, Apple’s victory against HTC with the International Trade Commission (ITC) could spell trouble for Google’s kingdom as it may cause Android products from either being banned in the U.S. or force Android manufacturers to cough up high licensing costs.
Couple the cost of licensing Android–both on smartphones and on tablets–technology from patent-holders Apple and Microsoft, the cost of using Android can be prohibitively high. In the tablet market, where the iPad dictates the overall price of the market–consumers can expect that a base WiFi-only 16 GB 10-inch tablet will cost around $500, if not less–and also given Apple’s economies of scale with key components from glass, touchscreen panels, memory, and other materials, rival manufacturers have a hard time keeping pace with cost and price when competing with Apple. That difficulty already existed when Android is technically ‘free’ to use from Google, but with the added licensing costs, tablet-makers using the Android platform may find it hard to compete on features, specs, price, and functionality.
As such, the high cost of licensing Android for the tablet market can be an advantage for Microsoft to capitalize on. If the company prices Windows 8 tablet at an affordable price–cheaper than the licensing and litigation costs involved when using Android for tablets–then the company can stand to gain market share in this category. Microsoft could potentially provide Windows 8 tablet OS licenses as a loss leader to gain market share away from both Android and iOS.
If Microsoft fails to gain market share in this tumultuous time of uncertainty with pending patent litigations, it may find that Apple may gain even more grounds with the iPad. The market-leading and market-defining iOS-based iPad can gain grounds if competing companies may be forced to price their Android tablet rivals higher due to added licensing costs.
As such, Android’s big blow of today can be Microsoft’s victory for tomorrow, but can Windows 8 tablets realize Microsoft’s dreams? In order for this to happen, Microsoft must slim down on Windows and bulk up on attractive consumer-centric features rather than focus its tablet strategy on a convoluted strategy that’s defined by the PC era. It’s time for Windows tablets to enter the post-PC age, and there’s a lot to gain when that happens.
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