Google buys Motorola!

[Doctor Stop]

What you say is spot on but consider that manufacturers other than Apple have no better alternative than Android.

That may be the case for HTC. It's quite possible that Samsung will drop Android and switch completely to their own Bada and try to forget their Android adventure. Samsung's already reverted to playing games to hide where their phone/tablet profits are coming from.

...the Android OS handsets blow the iPhones out of the water.

Even if that was the case, it doesn't matter if profits can't be made selling them. Even the shipped vs. sold figures are a dodge.

[Doctor Stop]

History is repeating itself, it's Windows vs Mac all over again and the results are already pretty clear: Apple will end up as a profitable boutique company while Android (think MS Windows) takes over the majority of the market.

Explain to me how Microsoft made and continues to collect a fortune on Windows, and then explain to me how Android enables whoever to do that. The situations are not comparable.

Now I'm thinking that Motorola and HTC will be the only Android makers left. Motorola, because Google made a stupid investment in them and will keep them afloat, and HTC because they don't have the software R&D resources to design their own competitive smartphone OS.

These are commodity devices and will become even more-so as time goes on.

The reason why Android manufacturers are having difficulty profiting on Android smartphones is because their phones already are commodities.

[Doctor Stop]

If anything, android has increased their profitability because these guys now don't have to spend nearly as much on internal software development and bribing developers to write programs for their narrow OS platforms.

...that they control the store for. They now don't have control over the platform or the store, and Google, the company that controls the platform and the store, was just now forced to buy one of them out.

[2triky]

They're going to need it because they're going to see a lot of those profits eventually going in other companies' pockets.

They're already paying Microsoft licensing fees for patents implicated in the sale of Android devices but notwithstanding the fact they seem to be doing well.

Obviously they're not making Apple money, but doubling your profits to $600 million in the span of one year is nothing to scoff at, given the economics times. While most companies are returning or have returned to profitability as a consequence of cost cutting measures and increased efficiencies, HTC is experiencing real growth in revenue & profit.

[matsuki]

That may be the case for HTC. It's quite possible that Samsung will drop Android and switch completely to their own Bada and try to forget their Android adventure. Samsung's already reverted to playing games to hide where their phone/tablet profits are coming from.

Once again, you speak the truth but if you consider how widespread Android is, it's going to be very difficult for Bada to get their foot in the door and gain customer acceptance. The strengths of both iOS and Android is the amount of developer and customer support. If iOS is Mac as Android is to Windows, what would Bada be? Look at the whole Facebook vs. google+ battle. Besides phone nerds like myself, many customers are still getting their first smart phones recently and it's not likely they'll really want to change OS in 2+ years when they finally decide to upgrade.

[FG Lurker]

Explain to me how Microsoft made and continues to collect a fortune on Windows, and then explain to me how Android enables whoever to do that. The situations are not comparable.

The situations are very comparable.

Operating Systems
MS provides an OS (Windows) and makes money from licensing fees.
Google provides an OS (Android) and makes money from advertising revenue.

Personal Computers
Companies like Dell, HP, Gateway, Lenovo, Toshiba, NEC, Fujitsu, etc sell PCs. They make their profits on hardware and preinstall Windows provided by Microsoft.

Apple uses many of the same (or very similar) components as used in Windows PCs but combines them with stunning industrial design and their own OS. They charge a large premium over a similarly spec'd Windows machine for this combination.

Smartphones
Companies like Samsung, LG, HTC, Motorola, Dell, Sony Ericsson, etc sell smartphones. They make their profits on the hardware and preinstall Android provided by Google.

Apple uses many of the same (or very similar) components as used in Android phones but combines them with stunning industrial design and their own OS. Currently there is not much of a premium for iPhones but there will be as the hardware matures and becomes more standardized.

Results
Windows-based computers dominate desktops and notebooks. Apple maintains a profitable niche.

Android-based smartphones will come to dominate smartphones. Apple will maintain a profitable niche.

This is inevitable. There are manufacturers using Android that are targeting all market segments. There will soon be Android phones completely free with contracts in the US and Europe. This is important as these phones will target people who are replacing "dumbphones" and enable them to switch to a smartphone without it costing them any extra. More Chinese manufacturers are coming into the market that are targeting the very low end of the market where the huge volume will be. (Think India, China, SE Asia, South America, and Africa.)

It's just a matter of time.

[American Oyaji]

One thing you forget FGL is that Apple isn't going to just stand still. They're a moving target and who knows what they'll come up with. They've got momentum with the iPhone and now the iPad which pretty much owns the tablet market.

What will they come up with next?

[FG Lurker]

One thing you forget FGL is that Apple isn't going to just stand still. They're a moving target and who knows what they'll come up with.

Apple has never been in the business of producing low-end low-margin items, it doesn't fit their business model.

It also isn't possible for them to be all things for all people, they're just one company and there is a limit to what they can do. Android (even more so than Windows before it) can be adopted by any manufacturer who can do whatever they want with it. Vertical niche markets? No problem. Mass produced ultra-low-end phones? Bring it on. Super high-end, cutting edge technology phone or tablet? Have at it. Anything goes.

I wouldn't be surprised to find that Apple doesn't even care. I have no doubt they will continue to have millions of satisfied customers, eventually several hundred million. They'll continue to be one of the largest single suppliers of smartphones and be highly profitable as they aim for a certain market level. Android however will end up being on several billion phones covering everything from ultra-low-end to iPhone-level high end.

[American Oyaji]

Actually, what you'll find is as they offer newer models, they will sell their older ones for less.

[Doctor Stop]

They're already paying Microsoft licensing fees for patents implicated in the sale of Android devices but notwithstanding the fact they seem to be doing well.

HTC is probably going to be paying around the same or more to Apple. Remember that HTC has already lost an initial ITC ruling last month and that's only one of the current cases against them.

[Doctor Stop]

The situations are very comparable.

Operating Systems
MS provides an OS (Windows) and makes money from licensing fees.
Google provides an OS (Android) and makes money from advertising revenue.

Google's advertising revenue from Android phones is apparently only $6 per user per year. If that number is correct, it's only a rounding error in comparison to Microsoft's Windows revenue per user.

Android, so far, is a machine administered by Google to make money for Microsoft.

[Doctor Stop]

Actually, what you'll find is as they offer newer models, they will sell their older ones for less.

And Apple comes out with only one new model a year, and they still can't make them fast enough to keep up with demand.

How many hundred different Android models are released a year? Even without the "free" Android OS, that's a lot of hardware R&D costs when you total it all up. That, and low brand loyalty for commodity items is one reason why it's been difficult to make a profit selling Android phones.

There's also the shipped vs. sold issue that I may have mentioned before. Apple gives sold figures. Android numbers are shipped or channel numbers which don't necessarily count as actual sales. They could be all dumped in a landfill after shipping as far as we know. Even Samsung is starting to get surprisingly secretive recently.

[Doctor Stop]

The South Korean government has urged its major electronics companies, Samsung and LG, to join a coalition of other Korean companies in developing their own mobile phone operating system. A South Korean deputy commerce minister said that "In the long term, we cannot go on like this by solely relying on Google."

http://www.fool.com/investing/general/2011/08/28/a-phone-threat-to-south-korea.aspx

[2triky]

Senate passes bill to overhaul patent system


WASHINGTON (AP) -- Congress gave President Barack Obama's drive to promote jobs growth a boost Thursday by presenting him with a major overhaul of the patent system that the president has sought as a means to spur innovation and put more people back to work.

The Senate voted 89-9 to pass the patent bill and send it to Obama for his signature. The vote came a little more than an hour before Obama's speech to a joint session of Congress on his jobs agenda and gave some evidence that lawmakers can, in an age of political division, occasionally find common ground.

The first major change in patent law in six decades is aimed at streamlining the patent process, reducing costly legal battles and giving the U.S. Patent and Trademark Office the money it needs to process patent applications in a timely fashion.

With passage, said Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., "we could unleash the genius of our country and put our entrepreneur class to work and create jobs. It can let us compete with the rest of the world."

The bill, he added, "is an opportunity to show the American people that Democrats and Republicans can come together to enact meaningful legislation for the American people."

Leahy's partner on the bill, House Judiciary Committee Chairman Lamar Smith, R-Texas, said it was the most significant change to patent law since the Patent Act of 1836 and hailed it as "one of the most significant jobs creation bills enacted by Congress this year."

Obama has urged Congress to send him what he has called "the most significant patent reform in over half a century" and in his speech to Congress he praised the Senate vote. "Today you passed reform that will speed up the outdated patent process, so that entrepreneurs can turn a new idea into a new business as quickly as possible. That's the kind of action we need."

The legislation, which transforms a patent system now operating on legislation passed in 1952, passed the Senate in March and the House in June in a slightly different form. Thursday's Senate vote accepted the House version.

It wasn't easy. Congress has debated a patent bill every year over the past six years and, before final passage, the Senate had to defeat three proposed amendments that would have forced the bill to return to the House and increased prospects of another deadlock.

The measure would switch the United States from the "first-to-invent" system to the "first-inventor-to-file" system for patent applications. That change would put the U.S. in line with other industrialized countries.

The proposal has met resistance from some small-scale and independent inventors who say it will put them at a disadvantage with big corporations. Supporters say it will add certainty to a system now riddled by costly lawsuits.

With rivals having to rely on their own secret documents to prove they were the first inventor, it becomes difficult to "gain a clear picture of whether a patent is valid without years of litigation" and millions of dollars of discovery and other litigation costs, said Sen. Jon Kyl, R-Ariz.

The bill would ensure that the patent office has the money to expedite the application process. It now takes an average of three years to get a patent approved. The agency has a backlog of 1.2 million pending patents. More than 700,000 have yet to be reviewed.

Since 1992 the agency has lost nearly $1 billion because what it receives from Congress is less than what it collects.

The original Senate bill would have given the agency more leeway to set fees and keep all the fees it collects. The House bill does give assurance the agency will have access to more money, but maintains congressional controls.

Leahy and other Senate supporters, while saying they preferred the Senate approach, urged their colleagues to accept the House bill as a whole so that they can deliver the bill to the president's desk.

Sen Tom Coburn, R-Okla, proposed an amendment that would have brought the bill back in line with the Senate on the fee issue, but it was defeated 50-48.

A separate amendment offered by Sen. Jeff Sessions, R-Ala., dealt with a House provision intended to clarify patent filing procedures, in light of a well-publicized court case.

A drug company was a day late in filing for a patent extension of a blood thinner; its application was rejected, at a cost of hundreds of millions of dollars. A court sided with the company and the House incorporated that ruling into its version of the patent bill. Sessions' attempt to strip that provision from the bill lost on a 51-47 vote.

The legislation also takes steps to reduce harassing litigation, and improve patent quality by enabling third parties to submit information that may be relevant to the granting of a patent.

It encourages U.S. manufacturing by allowing producers to continue to use a manufacturing process in this country even if another inventor later patents the idea.

While small-scale inventors are divided on the legislation, it has the backing of associations representing corporations such as Caterpillar Inc., and General Electric, as well as high-tech companies including Apple and Google, along with the U.S. Chamber of Commerce and the Association of American Universities.

IBM senior vice president Robert C. Weber in a statement praised "our elected officials for producing a bipartisan, common-sense bill that will significantly improve the U.S. patent system." IBM has been the top U.S. patent recipient for the last 18 years.

Source: Associated Press

[Doctor Stop]

These four threats against Android secured Motorola Mobility a $12.5 billion offer from Google

1. MMI would have taken a royalty-bearing patent license from Microsoft, and possibly also settled with Apple.

2. MMI would have revisited its exclusive focus on Android and possibly adopted Windows Phone.

3. MMI would have attacked other Android device makers with its patents to make their products more expensive.

4. MMI would have conducted a public or private auction of the entire company or large parts of its patent portfolio.