The last 14 months have been eventful and exciting especially in mobile space as smartphones have been registering stupendous growth. This development has not only lead to smartphone marketshare, valueshare and mindshare battles but have also led to astounding volume and value growth for some smartphone specialists whereas some handset industry incumbents have struggled and are trying to catch up in line with market growth rate.

In this highly competitive environment we are witnessing all possible growth, hype, product cycle and consumer interest trends and innovation not only at the vendor-hardware-product portfolio (ex: Nokia vs. Apple) level but also at software platforms (Android vs. iOS vs. Symbian, etc), attached enabling technologies (ex: NFC, WiFi, HDMI, etc.) and services (ex: Music, Video or Apps) levels. The net-effect when all these components fit together well lead to a great product and experience. Thus to drive this innovation, these players are competing in building their Intellectual Property portfolio in mobile hardware and software space. However, they are not only building IP portfolio to foster innovation but also intend to protect it and at the same time build a steady stream of revenues from IP licensing.

This trend has also led to the recent battles for external patent acquisitions. For example: RIM, Apple, Microsoft, Sony and Google competed recently to bid for 6000+ Nortel’s patents which were up for sale as well as the latest development of Google’s interest in acquiring InterDigital and its portfolio of 8800+ patents to gain competitive advantage in mobile space.

 

Over the same span of fourteen months we have also seen litigation pile up surrounding these mobile handset patents with some winners, some losers and some still hanging and fighting on. Some of the recent patent battles pertaining to Android is worth noting because of the tremendous growth Android has achieved in the same time-frame. Android being open-source and perceived to be low-cost has become one of the primary platforms for many device vendors as well as operators, developers and other players across different verticals dedicating full resources to develop a product attached to the Android ecosystem.

This has hindered the growth and revenue generating prospects of many potential licensable and other open platforms from Microsoft to MeeGo. However, the “openness” of the Google innovation adopted by different device vendors has been challenged by other players in mobile ecosystem such as Microsoft and Oracle which owns a large pool of patents in mobile software space which might have been infringed or not paid for in the developed Android product that delivers the complete smartphone experience. Thus, these series of lawsuits filed by the key players in the mobile ecosystem will not only lead to bump up in product development or manufacturing costs for the vendors delivering Android products but also puts the “low-cost” nature and “openness benefits model” into jeopardy as this cost is transferred either to the next stakeholder in the value chain which may or may not absorb this increment and in the end might pass on to the end-consumer.

In addition to losing the cost advantage in long run, the multiple flavors of "open" Android (with IP owned by different vendors) may create chaos and incompatibility and ironically the "closed" OS may exceed on the innovation curve in integrating all these key components and comparatively provide a superior experience. This ongoing IP battle shall thus affect every stakeholder in the mobile ecosystem.

The detailed implications of these ongoing IP battles can be found in the following latest Wireless Device Strategies Insight:

IPR Wars: Microsoft and Oracle Seeking to Push Up the Cost of Android