Microsoft Responds About HTC Deal– Concerned About Android

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The news of the licensing deal between HTC and Microsoft is surprising, primarily as it covers HTC’s work in the Android platform. Microsoft has provided licensing of its technology in the past, but this was the first time specifically covering the hot Android platform. Redmond wants to make it clear it is serious about protecting its intellectual property, and it is duly concerned about infringements of that IP inherent in the Android platform. We received this statement from Horacio Guiterrez, corporate vice president and deputy general counsel of Intellectual Property and Licensing at Microsoft:

Microsoft has a decades-long record of investment in software platforms. As a result, we have built a significant patent portfolio in this field, and we have a responsibility to our customers, partners, and shareholders to ensure that competitors do not free ride on our innovations.  We have also consistently taken a proactive approach to licensing to resolve IP infringement by other companies, and have been talking with several device manufacturers to address our concerns relative to the Android mobile platform.

Guiterrez recently shared his views on the Apple patent infringement suit against HTC. He feels licensing technology to third parties is vital to the growth of the smartphone segment, just as was done in the past when the main purpose of phones were “to make and receive calls.” Most interesting is his view on how the “software stack” in smartphones has replaced that important “radio stack” as the critical area in which technology licensing will play a big role.

Now, however, as a new category of ‘smart’ devices has emerged, the value proposition has moved to the software stack.  As is clear from advertising by all of the major brands – Apple’s iPhone, RIM’s Blackberry, Palm’s Pr?, Motorola’s Droid, and Windows Phones – people buy smartphones because they are fully functional computers that fit in the palm of your hand.  The radio stack is still valuable, as it allows the phone to connect to the Internet.  But what is most valuable is not the connection per se, but the new things that users can do with it – find nearby restaurants and movie theaters, send and receive email, and watch video, just to name a few.  The primary driver for adoption and sales in this market is the software on and available for the device.

This situation bears watching, and it is not clear how Android will fare over time. Android phone makers may need to all make deals with Microsoft and possibly Apple to cover all bets. Microsoft is not sharing details about which other companies it is in discussions with over Android infringements.

Image courtesy Microsoft

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