October 05, 2010, 11:22 AM — Last Friday I wrote about Microsoft's lawsuit filed against Motorola in which Redmond alleged the handset maker's Android-based smartphones violate nine Microsoft patents.
Then, over the weekend, Goldman Sachs downgraded shares of Microsoft, in large part because the company lags well behind RIM, Apple and Google in mobile OS market share, a space expected to become increasingly important (and lucrative) in the next few years.
Some speculate that Microsoft's legal gambit is nothing less than a bid to litigate Google's Android out of existence. While I'll grant that the motivation undoubtedly is there, it's highly unlikely Microsoft could make that happen, try as it might. The Android horse has left the barn and isn't coming back.
Then I read a good piece by Christopher Mims on the MIT Technology Review's website that offers a far more realistic scenario and underlying goal behind Microsoft's lawsuit against Motorola:
Microsoft's ultimate goal probably isn't to keep Motorola from using Android at all, but merely to add a cost component to Android, which is currently free for handset makers to use, whereas Microsoft's Windows alternative carries a licensing fee.
As Microsoft CEO Steve Ballmer told the Wall Street Journal, "Android has a patent fee. It's not like Android's free. You do have to license patents. HTC's signed a license with us and you're going to see license fees clearly for Android as well as for Windows."
But what if Google continues not to charge a license fee? That's what the lawsuit is all about, Mims theorizes (with the help of a patent attorney): By winning the lawsuit, Microsoft could force Motorola to pay it a licensing fee for each Android phone sold.
The problem with such a strategy is that it doesn't address Microsoft's genuine weakness in the smartphone OS market. Investors want to see competitive products and increased market share, not what many refer to as "patent trolling," something Microsoft routinely has been accused of in the past.