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It’s Too Late for Microsoft To Build Its Own Handset
29 JulGigaOM
Microsoft should be making its own handsets, says Peter Bright of Ars Technica. Licensing an operating system in the smartphone space doesn’t earn much money, so I understand Bright’s point. But the window of opportunity for Microsoft to build its own phone closed down the minute it said it would license Windows Phone 7 to hardware partners. The time to make the break from licensing a mobile OS and start making hardware has passed Microsoft by – at least until the next time the company decides to reinvent its place in the smartphone market, and even then it would bring challenges.
Bright’s description of the financial aspect of this situation I do agree with:
There just isn’t a whole lot of money in licensing a phone operating system like this. We don’t know, because the information isn’t public, just how much a Windows Phone 7 license will cost an OEM, but it’s generally assumed to be a few tens of dollars. Even assuming $30 per unit (which from what I can tell is on the high side), Microsoft’s partners would have to ship a whopping 30 million handsets to make this a billion-dollar business.
The first question that comes to mind then is: why is it a good idea for Google to give away Android and a bad idea for Microsoft to charge a license fee? The difference is in the business model. Google wants to keep its core, lucrative business in front of every eyeball it can with search and advertising. By being the dominant search engine, Google gains key information on search preferences or how consumers think when they use the web to find information. And of course, those preferences are paired with contextually relevant advertisements, where Google earns the bulk of its revenue, which it then shares with handset makers who use Android. Simply put: Google doesn’t need to charge for Android and if it did charge, that would add a barrier to adoption by hardware partners.
On the other hand, Microsoft does have to charge for its platform because it only has a small segment of the mobile search market and therefore earns far less money overall on mobile advertising. And by “small segment,” I’m probably understating the difference in both search and mobile search between Microsoft and Google. TechCrunch points out a Pingdom chart comprised of data from StatCounter, showing that Google owns more than 98 percent of the mobile search market. Microsoft’s Bing is a blip on the mobile map, not even registering a half a percent.
So based on the business model and consumer usage, Microsoft isn’t well placed to generate the kind of mobile search revenues of Google. The company has to charge a Windows Phone 7 licensing fee in order to get any real return from the platform. Other revenue opportunities are tied to Microsoft services – which will be heavily integrated into the new handsets — but income from those are variable. The only fixed income from Windows Phone 7 is an up-front fee.
The alternative is what Bright suggests: Microsoft goes it alone and builds handsets of its own and thus controls the entire experience of hardware and software, just as Apple does. Although Microsoft is a software company, it has broken out of the mold with the Zune and Xbox line of hardware. But at this point, it’s just too late for mobile. With Windows Phone 7, Microsoft has lined up hardware partners such as Dell, Asus, LG, HTC, and Samsung. There’s no way Microsoft can cut these companies off at the knees now and go it alone by building a Microsoft handset.
Perhaps another opportunity will appear when Microsoft can create its own phone, but even then, the company is at risk. Four of the five handset partners are also companies that build Microsoft Windows computers. If Microsoft cuts them out of the loop in mobiles, it won’t sit well with them from a notebook and desktop standpoint. Granted, I doubt that any of these partners would completely jump ship to Ubuntu, but such a situation would raise tensions between Microsoft and its partners.
And taking the theoretical one step further by assuming that Microsoft ever does build its own phone, how would such a beast compete in the market? From a perception standpoint, I’m not sold that consumers would embrace the Microsoft brand on a handset. Microsoft’s Zune hasn’t staged much competition against the iPod juggernaut even though Zune is a compelling device, as is the Zune Pass subscription service. Microsoft’s recent Kin debacle may be more attributable to internal politics and lengthy delays, but even had the device arrived on time, it wasn’t groundbreaking from a hardware perspective. Perhaps Microsoft should just ride the mobile platform licensing train down the tracks and leave it at that.
Related research on GigaOM Pro (sub. req’d):
To Win In the Mobile Market, Focus On Consumers

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.NET for Android prepares to get probed
29 JulThe Register
Port from Windows help
Microsoft's .NET for Android - dubbed MonoDroid - has come a step closer.…
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Microsofts Free Phone Giveaway
29 JulInformationWeek
Wow, Microsoft will be giving away a lot of phones this fall, about 90,000 of them. That's one way to make sure that Windows Phone 7 gets off to a fast start, for both users and developers. Given that Microsoft is far behind, it's something they need to do if they want to compete against iPhone and Android.


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Android Apps to Talk to Servers to Guard Against Piracy
28 JulUbergizmo

Piracy concerns and DRM protection are big components of mobile, digital software sales and companies like Apple, Google, and Microsoft must work hard not only to court developers to their mobile platforms, but to ease them into knowing that their work is safe and protected from looting pirates. Google, with its Android Market applications storefront, will be changing the way app licensing work to make it a safer playground for developers and hopefully keep things as pain-free and simple for consumers in the process.Permalink: Android Apps to Talk to Servers to Guard Against Piracy from Ubergizmo | Hot: iPhone 4 Review, iPad Review
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Letter From Silicon Valley: Doing the Math on Android vs. Apple
28 JulWired - Epicenter
If you live in the Silicon Valley echo chamber, nothing has been hotter lately than the Android/iPhone smackdown.
It’s been an amazing year so far for Apple. It introduced the iPad and a new iPhone, and the company can’t make either device fast enough to satisfy demand. It’s been an equally impressive year for Google’s Android, however. Last week Google reported that Android was in 40 countries and on 40 carriers. It said the Android App store now had in excess of 75,000 offerings, and it repeated an astonishing statistic first offered up in June: 160,000 Android smartphones were being activated each day.
The fight between Google and Apple is not over phones. It’s a software-platform war.We in the media had a field day with this data, especially in the wake of Apple’s real but overhyped issues with the iPhone 4’s new antenna. Do the math and you get 4.8 million Android phones a month, 20 percent more than Apple’s astonishing iPhone 4 sales.
The evidence seemed clear. A year ago, Android looked like it would never catch the iPhone. Now, it was overtaking it.
Sure, the Android app store has a quarter the offerings of the Apple app store, but the growth in new apps and activations has been astonishing in the last few months. Back in March, Google was activating only 1.8 million Android handsets a month and its store had only 30,000 apps. An instant poll at Fortune’s tech conference last week asked: “Who would have the dominant smart phone in five years?” The verdict was clear: 57 percent picked Android; 37 percent picked iPhone.
“You know, I heard that the most popular voice message on iPhone4 was, ‘Sorry I can’t answer your call, because I am holding my phone.’ I don’t think this is an issue with Droid X,” said SanJay Jha, Motorola’s CEO at last week’s Fortune technology conference. It was meant in jest; but, the underlying point — Android is better — was not.
The trouble with this horse race, however, is that one horse’s progress is being measured in meters while the other is being measured in yards. The comparison between Android and the iPhone is meaningless. The true comparison is between Android and iOS, Apple’s mobile operating system. Android’s activation numbers are not device dependent. Apple’s shouldn’t be either. If we are going to truly compare the two mobile OSs we need to include sales of iPads and iPod Touches. Add them into the mix and the data shows that Android is catching up but still isn’t close.
Here’s the math: I think we can all agree that Apple is selling iPhones at a rate of 4 million a month. Add the 1 million iPads/month Apple is selling and another 1.85 million/month as a guestimate for iPod Touch sales and you get … wait for it … 6.85 million iOS devices a month, or 42 percent more than Android. Apple doesn’t consistently provide iPod Touch numbers, but over the years it has provided enough data to make an educated guess.
Conclusion: iPod Touch sales have conservatively run about two-thirds of iPhone sales. If Apple sold 8.4 million iPhones last quarter, that means it sold 5.5 million iPod Touches, or 1.85 million a month.
I’m not minimizing the Android challenge to Apple. Indeed, I think it is likely to become the most important business battle of the next half decade. But those who argue that the best lens for watching this fight is comparing just the iPhone to Android are just wrong. Their argument is that all Android devices are phones, that the iPod Touch and the iPad are not phones.
The trouble with this reasoning is that the fight between Google and Apple is not over phones. It’s a software platform war. The fight is over who will create the most powerful ecosystem of developers, users and mobile devices. Indeed, the reason the fight has gotten so nasty is because history tells us that in such a fight, one platform typically dominates the market (see Microsoft vs. Apple and IBM, eBay vs. Yahoo Auctions and Auction Universe, Google vs. Yahoo and Microsoft).
There will be a lot to disagree on in the coming months as this battle plays out. Is this a repeat of the Apple-Microsoft fight 25 years ago? Will phones and tablets eclipse PCs and TVs as our primary device for work and fun? Will Silicon Valley eclipse New York and Hollywood as a media center? But let’s get our numbers right.
Fred Vogelstein is writing a book about the intersection of media and tech in Silicon Valley. Follow him on Twitter @fvogelstein and Epicenter on @epicenterblog.
See Also:
- Apple’s iPad Sales Accelerate: 3 Million Sold in 80 Days
- Apple iPad Reaches ‘1 Million Sold’ Twice as Fast as iPhone
- HTC Files to Ban U.S. iPhone, iPad, iPod Sales
- Apple Sells 300,000 iPads Saturday, But Sustainability Is Key to Success
- Oppenheimer Sees iPhone 4 Sales of 1.5 Million on First Day
- Apple Stock Drops Since iPhone 4; Analysts, Consumers Unfazed
- Apple Fires at HTC, But the Target Is Google
- Showdown: iPhone 4 vs. HTC Evo 4G
- Wired Video: HTC Evo 4G Dissected
- HTC Evo 4G Is a Blockbuster for Sprint
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The Technology Newsbucket: Android gets bloaty, and a guide to London's blue plaques
28 Julguardian.co.uk
A quick burst of 13 links for you to chew over, as picked by the Technology team
Bloatware creeps into Android phones >> Ars Technica
This is about the US - though we've spied some on UK ones already. What's the worst example?PlaqueGuide London >> PlaqueGuide
Need to find a blue plaque (you know, the places where famous people lived or did things?) here you go. An implementation of one of the ideas from the showusabetterway.com competition started by Tom Watson MP when he was a Cabinet Office minister in the previous, Labour, government.
Photo by AndyRob on Flickr. Some rights reservedWhy Secunia's vulnerability report highlights Apple over Microsoft >> AppleInsider
"Secunia's vulnerability counts reset when Microsoft changes the name of its product, but continue to accumulate for Apple because the company hasn't rebranded Mac OS X since 2003, when Secunia began keeping track. Browsing Secunia's database, it appears Mac OS X has suffered from hundreds of vulnerabilities while Microsoft's Windows has racked up far fewer, but that's only because Microsoft's regular rebranding efforts reset Secunia's clocks." Ah. Plus it doesn't distinguish between really dangerous vulnerabilities and trivial ones. Will this stop people writing about Secunia?Online Communities: mapping the web's social networks (note: old) >> xkcd
You can tell roughly how old it is by comparing the sizes of Facebook and MySpace.Apple Magic Trackpad official, shipping now for $69 >> Engadget
We knew it was coming, so here it is. Officially.Chatroulette To Log IP Addresses, Take Screenshots >> Slashdot
Your mobile app is spying on you >> VentureBeat
Are Location-Based Services All Hype? >> ReadWriteWeb
Bing Is The Biggest Loser In Yahoo Japan's New Google Deal >> Business Insider
Google Maps for Android updated to 4.4, adds dedicated 'Places' for searching nearby >> Engadget
Google Nabs Patent To Monitor Your Cursor Movement >> Slashdot
Yahoo: Pageviews Aren't As Low As ComScore Said >> paidContent
Digg Vs. Reddit: The Infographic >> TechCrunch
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HTC To Sell HTC-Branded Android, Windows Mobile Smartphones In China
27 JulTechCrunch

Taiwan-based phone manufacturer HTC has been selling smartphones in China under the name Dopod for many years, but this morning the company announced that it will soon start selling TD-SCDMA-based phones with the HTC brand actually attached to them.
In a press release issued moments ago, the company said it has teamed up with carrier China Mobile to bring future HTC phones to market and formed a new distribution partnership with China’s largest electronics distributor, GOME Electrical Appliances.
Initially coming to mainland China are HTC’s newly unveiled smartphones with the Sense user interface: The HTC Tianxi, Tianyi, Desire and Wildfire.
The latter products are familiar high-end Android phones – they will be carried by mobile operator China Unicom – but this was the first I’d ever heard of the HTC Tianxi and HTC Tianyi. According to a report from the Wall Street Journal, those two new phones will are touch-screen models designed exclusively for China Mobile.
One will apparently be a high-end model running Microsoft Windows Mobile OS (this one, perhaps?), the other a mid-priced device running Android. HTC reportedly expects the handsets will be available to consumers in September or October 2010.
Last year, HTC shipped 12 million phones globally. North America accounts for 50 percent of its market share, Europe for 30 percent while 20 percent comes from the rest of the world.
HTC says the move to introduce its proper brand in China is to enable it provide more after-sales service to consumers, but it’s undoubtedly also a strategy to protect itself from the fast-growing number of counterfeit HTC devices that are increasingly available on the Chinese market, as well as a way for the company to gear up for the battle against Research in Motion, Nokia and of course Apple, which isn’t yet selling the iPhone 4 in China although it introduced the iPhone 3GS in October 2009.
If you’re interested in this market, you should read our recent guest post on why Android is poised to dominate in China.
(Hat tip to Global Times)
Information provided by CrunchBase

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In China, Baidu Fights Google for Control of Android’s Search
26 JulGigaOM
Baidu, China’s largest search engine, is working with handset makers to become the default search box on Google Android phones. Robin Li, Baidu’s founder and CEO, wants “a search box very prominently on the phone’s screen,” says the WSJ. Li’s initiative could be met with a simple Baidu search widget, but a far bigger coup would be if Baidu replaced Google as the default search engine when an Android phone user presses the dedicated search button on the handset.Such a move would help Baidu steal away the brand identity and ad revenues from Google’s own mobile platform. Currently, Google doesn’t charge handset makers any licensing fees to use the Android operating system, so Google earns money from the mobile advertising revenues through web searches. Google also shares such revenues with the handset makers, so from a certain point-of-view, Android phone makers like HTC, Motorola and Samsung are paid to build Android smartphones. As a result, Baidu may need to offer a similar deal to entice a switch from Google to Baidu for the default search engine on future Android phones.
Although Baidu isn’t a household name far beyond China, it is the most popular search engine within the country — according to last week’s data from StatCounter, a web-tracking service, Baidu was used for 62.31 percent of all searches in China, or nearly twice that of Google’s 35.84 percent. Other estimates have Baidu’s search share nearing three-quarters of all searches in China. Due to China’s large population, currently estimated at more than 1.3 billion people, Baidu’s 4.6 percent global search market share already rivals that of Microsoft’s 4.8 percent. And just under two-thirds of the Chinese have a cell phone, so Baidu wants to continue its search dominance as more Chinese consumers join the mobile web.
Related content from GigaOM Pro (sub req’d):
Do You Have What It Takes to Do Business In China?

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Microsoft license ARM chip tech
23 JulSlashGear
Chipset designer ARM has announced that Microsoft is licensing its architecture, signifying a greater interest on the part of the software giant into the processors that power its Windows Phone 7 smartphone platform. While no details as to the financial terms of the deal have been made public, according to Microsoft general manager KD Hallman, ”with closer access to the ARM technology we will be able to enhance our research and development activities for ARM-based products.”That not only encompasses Windows Phone 7 but some devices running Windows 7 Embedded as well; the latter OS is being positioned as ideally suited to tablets and smartbook-style products, though recently Microsoft has seen brands like ASUS abscond to platforms like Android. Microsoft and ARM have apparently been working closely since 1997, but this new agreement could allow Microsoft to produce their own ARM-based CPU similar to how Apple has struck out on its own with the Apple A4 that powers the iPad and iPhone 4.
Press Release:
Microsoft Licenses ARM Architecture
23 July 2010ARM and Microsoft continue relationship with closer access to ARM IP
CAMBRIDGE, UK – July 23, 2010 – ARM and Microsoft Corp. today announced that they have signed a new licensing agreement for the ARM® architecture. The agreement extends the collaborative relationship between the two companies. Since 1997 Microsoft and ARM have worked together on software and devices across the embedded, consumer and mobile spaces, enabling many companies to deliver user experiences on a broad portfolio of ARM-based products.“Microsoft is an important member of the ARM ecosystem, and has been for many years,” said Mike Muller, CTO ARM. “With this architecture license, Microsoft will be at the forefront of applying and working with ARM technology in concert with a broad range of businesses addressing multiple application areas.”
“ARM is an important partner for Microsoft and we deliver multiple operating systems on the company’s architecture, most notably Windows Embedded and Windows Phone,” said KD Hallman, general manager, Microsoft. “With closer access to the ARM technology we will be able to enhance our research and development activities for ARM-based products.”
ARM licenses processor IP under a flexible licensing model, enabling highly integrated solutions for a variety of applications ranging from mobile devices to home electronics and industrial products. ARM customers can license the ARM architecture or specific processor implementations.
Details of the agreement will remain confidential.
About Microsoft
Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.About ARM
ARM designs the technology that lies at the heart of advanced digital products, from wireless, networking and consumer entertainment solutions to imaging, automotive, security and storage devices. ARM’s comprehensive product offering includes 32-bit RISC microprocessors, graphics processors, video engines, enabling software, cell libraries, embedded memories, high-speed connectivity products, peripherals and development tools. Combined with comprehensive design services, training, support and maintenance, and the company’s broad Partner community, they provide a total system solution that offers a fast, reliable path to market for leading electronics companies. Find out more about ARM by following these links:Relevant Entries on SlashGear
- Microsoft Explorer Mouse and Mini Mouse to feature BlueTrack tech
- Make Your License Plate Unreadable
- Microsoft Annouces Vista Release Dates, Changes Licensing Terms
- Slashgear to attend the AMD/Microsoft Tech Tour
- AMD call Intel’s bluff on x86 license threat
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The Technology newsbucket: Microsoft mini'd, AOL's Android, insecure Apple? and more
23 Julguardian.co.uk
Plus Zuckerberg joins Simpsonbook, Facebook's departures, the missing tube map and more

Mini-Microsoft is probably not in this car. Photo by Okko Pyykkö on Flickr. Some rights reserved
A quick burst of 9 links for you to chew over, as picked by the Technology teamMicrosoft FY10Q4 Results >> Mini-Microsoft
Always worth seeing these results through the eyes of a Microsoft manager who takes a quizzical look at where his company's going. And the comments are usually worth mining too.AOL Mobile Goes HTML5, Picks Android Over iPhone for New App >> Gigaom
"I asked David Temkin, the new VP of Mobile for AOL, why the company chose Android over the iPhone. His reply: 'Momentum is the key reason.'"Apple the new world leader in software insecurity.. depending how you define security >> Ars Technica
"Though this does not necessarily mean that Apple's software is the most insecure in practice—the report takes no consideration of the severity of the flaws—it points at a growing trend in the world of security flaws: the role of third-party software."In other news, having cancer and having an ingrown toenail to be judged equivalent in "illness register".
Facebook Creator Mark Zuckerberg to Get Yellow on The Simpsons >> Vulture
You know what? We were going to show you how it would look by taking a picture of Zuckerberg and uploading it to Simpsonize Me. But it's broken. Damn.Facebook losing key demographic of 18-35 year-olds >> IndustryPace
Which could either mean that it's tapped them out, or that they really are leaving.Sorry, Microsofties, Blaming Steve Ballmer For Your Crappy Stock Price Is Ludicrous >> Business Insider
Henry Blodget - he used to tip stocks, you know: "If Microsoft employees want to blame Steve Ballmer for Microsoft's fundamental business performance over the past decade, that's one thing. Thinking that he has done a fine job with the business but holding him responsible for the crappy stock performance, however, is absurd."Clapham is a hole, and other curiosities of the London Underground >> PeteSearch
Investigating how close people are to London Underground stations via OpenHeatMap. Though really what you want is to have railway stations *and* tube stations to find the really distant places.Motorola sues Huawei over base-station trade secret theft >> ZDNet UK
"Motorola is suing Huawei for allegedly misappropriating trade secrets, according to an amended complaint filed in a US district court on 16 July.
According to Motorola's original complaint, five of its former employees had been passing on trade secrets to a wireless technology competitor called Lemko, itself set up by people who had been working for Motorola at the time. The trade secrets in question covered technologies such as GSM, UMTS, WiMax and push-to-talk.
However, in the amended complaint, Motorola said it had learned that the defendants had been secretly working for the Chinese manufacturer Huawei, a major competitor to Motorola."Celebrated authors bypass publishing houses to sell ebooks via Amazon >> guardian.co.uk
"The authors [Philip Roth, Salman Rushdie, Martin Amis and more] all share Wylie as their agent, and the move makes good on his threat last month that, dissatisfied with the terms publishers have been offering for ebooks, he would remove them from the equation."Great if you're a "celebrated author". Tougher if you aren't.
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Sign up for your free account nowThis week's news on Microsoft on Android.
-
It’s Too Late for Microsoft To Build Its Own Handset
29 JulGigaOM
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.NET for Android prepares to get probed
29 JulThe Register
-
Microsofts Free Phone Giveaway
29 JulInformationWeek
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Android Apps to Talk to Servers to Guard Against Piracy
28 JulUbergizmo
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Letter From Silicon Valley: Doing the Math on Android vs. Apple
28 JulWired - Epicenter
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The Technology Newsbucket: Android gets bloaty, and a guide to London's blue plaques
28 Julguardian.co.uk
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HTC To Sell HTC-Branded Android, Windows Mobile Smartphones In China
27 JulTechCrunch
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In China, Baidu Fights Google for Control of Android’s Search
26 JulGigaOM
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Microsoft license ARM chip tech
23 JulSlashGear
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The Technology newsbucket: Microsoft mini'd, AOL's Android, insecure Apple? and more
23 Julguardian.co.uk





