Will Google be forced to change its Android business plan?

  • Posted: 17 October 2011 05:56 PM

    Google and its licensees are under siege for violating the Intellectual property of other companies.

    Oracle is suing them for using Java without a license and making unauthorized changes to it.  They are seeking damages and an injunction to stop licensing Android.  Oracle doesn?t want to put them out of business; they just want to make a lot of money.  I believe Oracle?s chances of winning are very good.

    Microsoft has sued a number of hand set manufacturers claiming unauthorized use of MS intellectual property.  Many (eight?) of them are now paying MS license fees.

    Apple is suing Samsung, HTC and Motorola for patent infringement and other IP issues.  They are also being counter-sued.  So far Apple has won a number of decisions and lost none.  Samsung , for example, cannot sell their latest tablet in Australia and Germany.

    I believe that Apple and Oracle will prevail in most of their suits.

    So what is Google to do?  They can give up and withdraw Android, but I believe that that is very unlikely.

    More likely Google will have to change its business plan.  Their principals are not stupid and have probably thought this through, developed a Plan B, and are probably at work taking whatever measures they think are necessary.

    One possibility is that Google could develop a new OS that does not infringe Apple?s and Oracle?s intellectual property.  This would not ?forgive? past sins, nor would it help their current licensees who are being sued for infringing Apples product and related intellectual property.

    Another is that Google could license Oracle?s IP and let their licensees fight it out (and probably lose) to Apple, or more likely adopt other operating systems.  Google could go into the hand set business themselves through Motorola Mobility and design phones which do not infringe Apple?s IP.

    Of course this is largely speculation and none of this may happen.

    I am curious to hear what other members think Google could do if my speculations are right.

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  • Posted: 17 October 2011 06:30 PM #1

    westech - 17 October 2011 08:56 PM

    Google and its licensees are under siege for violating the Intellectual property of other companies.

    Oracle is suing them for using Java without a license and making unauthorized changes to it.  They are seeking damages and an injunction to stop licensing Android.  Oracle doesn?t want to put them out of business; they just want to make a lot of money.  I believe Oracle?s chances of winning are very good.

    Microsoft has sued a number of hand set manufacturers claiming unauthorized use of MS intellectual property.  Many (eight?) of them are now paying MS license fees.

    Apple is suing Samsung, HTC and Motorola for patent infringement and other IP issues.  They are also being counter-sued.  So far Apple has won a number of decisions and lost none.  Samsung , for example, cannot sell their latest tablet in Australia and Germany.

    I believe that Apple and Oracle will prevail in most of their suits.

    So what is Google to do?  They can give up and withdraw Android, but I believe that that is very unlikely.

    More likely Google will have to change its business plan.  Their principals are not stupid and have probably thought this through, developed a Plan B, and are probably at work taking whatever measures they think are necessary.

    One possibility is that Google could develop a new OS that does not infringe Apple?s and Oracle?s intellectual property.  This would not ?forgive? past sins, nor would it help their current licensees who are being sued for infringing Apples product and related intellectual property.

    Another is that Google could license Oracle?s IP and let their licensees fight it out (and probably lose) to Apple, or more likely adopt other operating systems.  Google could go into the hand set business themselves through Motorola Mobility and design phones which do not infringe Apple?s IP.

    Of course this is largely speculation and none of this may happen.

    I am curious to hear what other members think Google could do if my speculations are right.

    Android and Google are inseparable.  The time to develop a new OS from scratch would do Google no good.  In the time that they undertook such a project all of their ‘partners’ will have scattered with the wind.  I think MSFT’s strategy is to provide a safe haven for those ditching Android, and being content with a #2 position.

    Even in its nascent stage WebOS is superior to Android, but acquiring it may be Google’s only chance to remain a viable contender.  Without functionality comparable to SIRI, and Apple’s iCloud, Android is toast.

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  • Posted: 17 October 2011 06:43 PM #2

    It seems that Apple is pursuing Android hard on multi-touch.  Does anyone know if Microsoft is somehow safe from this same attack?  If they are just as exposed as Android, then is Microsoft really a safe haven for handset makers?  The Android strategy is going to be influenced a lot on what the alternatives are in my opinion, which is why I am trying to understand this question.

         
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    Posted: 17 October 2011 07:08 PM #3

    I think Microsoft has enough if it’s own multi-touch patents that they make a less then ideal target.

    Bill Buxton from Microsoft Research has written extensively on the issue.


    http://www.billbuxton.com/multitouchOverview.html

         
  • Posted: 17 October 2011 07:29 PM #4

    Gregg Thurman - 17 October 2011 09:30 PM
    westech - 17 October 2011 08:56 PM

    Google and its licensees are under siege for violating the Intellectual property of other companies.

    Oracle is suing them for using Java without a license and making unauthorized changes to it.  They are seeking damages and an injunction to stop licensing Android.  Oracle doesn?t want to put them out of business; they just want to make a lot of money.  I believe Oracle?s chances of winning are very good.

    Microsoft has sued a number of hand set manufacturers claiming unauthorized use of MS intellectual property.  Many (eight?) of them are now paying MS license fees.

    Apple is suing Samsung, HTC and Motorola for patent infringement and other IP issues.  They are also being counter-sued.  So far Apple has won a number of decisions and lost none.  Samsung , for example, cannot sell their latest tablet in Australia and Germany.

    I believe that Apple and Oracle will prevail in most of their suits.

    So what is Google to do?  They can give up and withdraw Android, but I believe that that is very unlikely.

    More likely Google will have to change its business plan.  Their principals are not stupid and have probably thought this through, developed a Plan B, and are probably at work taking whatever measures they think are necessary.

    One possibility is that Google could develop a new OS that does not infringe Apple?s and Oracle?s intellectual property.  This would not ?forgive? past sins, nor would it help their current licensees who are being sued for infringing Apples product and related intellectual property.

    Another is that Google could license Oracle?s IP and let their licensees fight it out (and probably lose) to Apple, or more likely adopt other operating systems.  Google could go into the hand set business themselves through Motorola Mobility and design phones which do not infringe Apple?s IP.

    Of course this is largely speculation and none of this may happen.

    I am curious to hear what other members think Google could do if my speculations are right.

    Android and Google are inseparable.  The time to develop a new OS from scratch would do Google no good.  In the time that they undertook such a project all of their ‘partners’ will have scattered with the wind.  I think MSFT’s strategy is to provide a safe haven for those ditching Android, and being content with a #2 position.

    Even in its nascent stage WebOS is superior to Android, but acquiring it may be Google’s only chance to remain a viable contender.  Without functionality comparable to SIRI, and Apple’s iCloud, Android is toast.

    Google may have been working on a new Mobil OS for quite a while.  Or they may have just decided to tough it out, hoping against hope that they would ultimately win.  This, IMHO, would be incredibly stupid.

    One possibility is that they will use Motorola to manufacture a new hand set with a different OS and let Android as we know it, die as the current licensees abandon it.

    In any case it is good for Apple (unless you don’t like Apple).

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  • Posted: 17 October 2011 07:56 PM #5

    Google’s report from the most recent qtr: Revenue. 96% from Advertising, 4% Other revenue.
    Hard to justify paying a license to MS or ORCL on a product the company gives away.  I have been watching the numbers closley for months and in a nutshell Adsense is making them all the top line and bottom line for that matter. The rest of the projects are are funded from Adsense. Adsense is brilliant and easily the most productive ad revenue model in the ad industry and much like AAPL, no competitor on the horizon (for you techies it has something to do with solving the long-tail issue: thats the core of the secret sauce). 
    Wall st is enamoured with all the things that don’t matter from a financial perspective.  It has yet to be seen the reaction from handset providers when GOOG goes to them one day and says, “Hey that OS we have been giving you for so long and helping you with you margins, well we need you to pay for it now”.  Easy to show market share growth on a product that one gives away.

         
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    Posted: 17 October 2011 08:09 PM #6

    One of my theories has been that Oracle is going after Google with such ferocity partly to defend Apple, as Ellison literally loved Steve Jobs. I just came across the following article that agrees:

    Google’s Miscalculated Obama Gambit

    Larry Ellison, the CEO of Oracle (Nasdaq: ORCL)—and likely the scariest CEO still living—was a close personal friend of Steve Jobs. He has a real issue with companies that allegedly steal from him and worked incredibly hard to nail SAP (NYSE: SAP) when he thought one of SAP’s subsidiaries was stealing from him.

    Ellison’s attack on Google with Java appeared to be timed on top of the realization that Steve Jobs, Larry’s closest friend, was ripped off by that company. In other words, Larry has Steve’s back, and word is that Larry was very upset by Steve’s death. Oracle has one of the most powerful lobbying teams on the planet, next perhaps to Microsoft’s, and the idea that his president would take away his friend’s victory likely won’t sit very well with Larry, who has a writing relationship with publications like The New York times.

    Love that part about scariest CEO “still living.”

    Reading the Foss Patents Blog, the author seems convinced that Google is in a lot of trouble with the Oracle suit, and that Ellison might exact a seriously expensive licensing fee on Android, rather than settle the case for a lump sum. A nuclear option would be to seek an injunction and not license.

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