Saturday, September 10, 2011

Expect Microsoft to sue Amazon over its upcoming tablet

Amazon is pinning great hopes on its Android-based tablets, the first of which is due this fall. Expect Microsoft to set its lawyers loose on the company not long after the first tablet's release, because Microsoft has been suing most major makers of Android devices, and the Amazon tablet is expected to be a big seller.

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The Amazon tablet will likely be the first Android-based tablet to hit big sales numbers. Forrest expects that Amazon will sell a whopping 3 to 5 million of them in the final quarter of 2011.

Microsoft has been suing makers of Android smartphones and tablets, in the hopes of hurting that smartphone operating system and giving a better chance to Windows Phone 7 devices, as well as the upcoming Windows 8 tablets when they're finally released.

Microsoft has sued a variety of manufacturers of Android devices for alleged patent violations, including Motorola, Barnes and Noble, and others. A variety of other manufacturers have agreed to pay Microsoft for every Android device they sell, including HTC, Velocity Micro, and many others. Today, Microsoft announced that Acer has also agreed to pay Microsoft for every device sold using Android.

These payments help Microsoft in several ways. First, they make Android devices more expensive. HTC, for example, is believed to pay Microsoft $5 for every Android device it sells. Microsoft is said to be asking for payments of between $7.50 and $12.50 for each unit sold from other makers of Android devices.

Secondly, the payments are a revenue source. Some reports say that Microsoft gets more revenue from licensing fees from Android devices than it gets from sales of Windows Phone 7 devices.

Given all that, the Amazon tablet should be a big target for Microsoft. If Microsoft can get Amazon to pay up, it will make Amazon tablets more expensive, and make it easier for Windows 8 to compete against them. And given the big sales expected from Amazon tablets, it could be a significant revenue source. If Microsoft gets $10 per tablet, that translates into between $30 million and $50 million in the final quarter of 2011 alone.

So you can expect that consumers aren't the only people waiting for the release of Amazon tablets --- Microsoft lawyers are probably chomping at the bit as well.

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