Microsoft's week included more Android royalty agreements, reports of falling smartphone share and a search-engine agreement with Baidu.
Microsoft
continued its Android march this week, with a report that the company plans on
demanding $15 from Samsung for each Android smartphone produced by the
manufacturer.
That
information apparently came from unnamed industry officials speaking to the
Seoul-based
Maeil Business Newspaper,
and found its way into
a July 6 Reuters report. Were Samsung to enter
some sort of royalties deal, it would become the latest in an increasingly long
string of companies paying Microsoft an "Android tax." Microsoft
insists that Google's Android platform violates a variety of patents it holds.
So far, most
of those companies have been small: Wistron Corp., Onkyo Corp., Velocity Micro
and General Dynamics Itronix have all agreed within the past 10 days to a
royalty agreement. However, both Amazon and HTC pay Microsoft, suggesting that
some big enterprises are also in Microsoft's sights.
And some
companies have fought back. Motorola retaliated to a Microsoft patent-infringement
suit with an intellectual-property complaint of its own. And Barnes &
Noble, whose Nook e-reader uses Android, filed a countersuit against Microsoft
after the latter sued it for patent infringement.
"Microsoft
is misusing these patents as part of a scheme to try to eliminate or
marginalize the competition to its own Windows Phone 7 mobile-device operating
system posed by the open-source Android operating system and other open-source
operating systems," read the bookseller's counterclaim,
filed April 25 with the U.S. District Court for the Western
District of Washington at Seattle. "Microsoft's conduct directly harms
both competition for and consumers of eReaders, smartphones, tablet computers
and other mobile electronic devices, and renders Microsoft's patents
unenforceable."
Even as
Microsoft pushes for Android royalties, there are indications that its own
smartphone market share is in serious trouble. For the three-month period between
the end of February and the end of May, research firm comScore estimated
Microsoft's U.S. share dipping from 7.7 percent to 5.8 percent. That comes
despite the marketing push behind the Windows Phone platform.
During the
same period, adoption of Android rose from 33 percent to 38.1 percent, while
Apple enjoyed a slight uptick from 25.2 percent to 26.6 percent. Research In
Motion continued its market slide, declining from 28.9 percent to 24.7 percent.
The top mobile
OEMs, in descending order of market share, included Samsung, LG Electronics,
Motorola, Apple and RIM.
Microsoft can
only hope that its upcoming Windows Phone "Mango" update will
increase the platform's appeal to consumers and businesspeople. As Microsoft
executives demonstrated for a small group of media and analysts during a May
press event in New York City, Mango's new features include a redesigned Xbox
Live Hub, home-screen tiles capable of displaying up-to-the-minute information,
the ability to consolidate friends and colleagues into groups, and visual
voicemail-more than 500 new elements in all, if Microsoft is to be believed.
Mango is due
for release sometime this fall. Samsung, HTC, LG Electronics and Nokia have all
committed to building new Windows Phone devices preloaded with Mango. Meanwhile,
Acer, Fujitsu and ZTE have apparently agreed to produce Windows Phone units for
the first time.
Microsoft's
issues with Google also extended to the search realm, with news that Redmond is
pairing with China's largest Internet search provider, Baidu, to provide users
with search results for English-language queries.
Although
Google continues to dominate the worldwide market for Web search, the company's
run-ins with the Chinese government over issues like censorship are well known.
Following a hack of Google servers in early 2010 that exposed Gmail accounts of
human-rights activists, Google ceased censoring search results in the country
and redirected users to the Google.hk domain in Hong Kong. In March, the
company accused the
Chinese government of disrupting Gmail service.
A spokesperson
for Shanghai MSN Network Communications Technology, also known as MSN China,
told the Wall Street Journal July 4 that the
results would be labeled as coming from Bing. The deal holds substantial
benefits for both companies: Baidu is looking to expand its user base, while
Microsoft has made no secret of its desire for inroads into the Chinese market.
The question
is whether the Chinese government will demand Microsoft censor those
English-language results. "Microsoft respects and follows laws and
regulations in every county where we run business," a Microsoft
spokesperson
told The New York Times July 4. "We operate
in China in a manner that both respects local authority and culture and makes
it clear that we have differences of opinion with official content-management
policies."
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