Microsoft and HTC – Lip service

Other handset makers will only pay lip service to Microsoft.

• The wires are alive with the idea that Microsoft is begging HTC to resume making Windows Phones but I am sure the reality is quite different.
• Bloomberg is reporting that Microsoft has held discussions with HTC with regards to its failure to launch a Windows Phone device.
• On the table is the prospect of HTC launching a single form factor which can run either Android or Windows Phone.
• This is quite feasible as Windows Phone was originally designed to fit onto the same hardware as Android making single form factor dual OS reasonably straight forward.
• Microsoft also appears to be willing to cut its licence fee as an incentive.
• I suspect that the reality is quite different and that the meetings are more about gently reminding HTC that it has made commitments to support Windows Phone which HTC needs to live up to.
• Furthermore, I think that Hell will freeze over before Microsoft agrees to drop its licence fee as that is the beginning of the slippery slope of price erosion.
• The piece that I believe that everyone is missing is the fact that Microsoft owns a large number of patents that are essential to Android. (see here).
• Microsoft acquired a company in 2008 called Danger that was founded by Andy Rubin, the creator of Android.
• When Andy left Danger in 2003 to create the Android he took the ideas of Danger with him but critically not the patents.
• Like all engineers creating product, patent infringement is an afterthought and so he created Android to the best of his abilities.
• The result was that many aspects of Android are very similar to the old Danger system for which Microsoft now holds all the patents.
• Microsoft has used this patent leverage to ensure that other handset makers continue to support Windows Phone and more importantly, continue to pay the licence fee of $10.
• Now that Nokia Devices will be owned by Microsoft, all pretence of independence has been lost.
• I am certain that all of the other handset makers would drop Windows Phone given a half a chance
• Unfortunately, Microsoft’s ownership of the Danger patents is likely to ensure that this chance never materialises.
• Instead, the other handset manufacturers are likely to do just enough to keep Microsoft off their backs when it comes to the Android patents.
• In reality, Windows Phone is going to have one manufacturer and one manufacturer only.
• Hence, we are likely to see token support and a single device launched at some point by Samsung, HTC and LGE but for all intents and purposes these manufacturers have already deserted the platform.
• This is not necessarily a negative for Windows Phone as the Nokia devices are far better than any other and are likely to be the only ones that really matter.
• The greater issue at stake is getting the platform to take off, and here Microsoft still has a lot of work to do.