Phone makers back Android but flirt with other options

Last week, a U.S. court ruled Samsung's Android devices were violating Apple patents a major blow to the leading mobile software platform because it could lead to sales bans and high licensing fees.

The impact could also hit smaller vendors that use Android like HTC, ZTE, and Sony. Android is used in more than two thirds of smart phones.

Huawei, Sony, Lenovo and ZTE which all use Android extensively - told Reuters they were continuing to bet on the Google's platform despite the ruling.

"(The ruling) is not relevant to what we are doing," said Chris Edwards, chief of ZTE's business development in Europe.

But as the mobile market matures and more patent cases look likely, some makers are looking at the alternatives.

Samsung, which has used a number of platforms but now mostly uses Android, announced a new phone running on Microsoft's new Windows Phone 8 software at a consumer technology conference on Wednesday, sneaking ahead of a hotly-anticipated launch of a Nokia-Windows phone due next week.

Shares in Nokia, which has partnered with Windows and is its main user, jumped after the Samsung ruling on expectations it might be a safer legal bet than Android makers.

The California jury said Samsung infringed six of seven Apple patents in the case, including technology that recognises whether one or two fingers are on the screen, the front surface of the phone and the design of screen icons, which is a clear reference to Google's technology.

After the verdict, Google said that most of the patents involved "don't relate to the core Android operating system."

Android was used in 68 percent of all smartphones sold last quarter, with Samsung making almost half of them, while Microsoft had 3 percent market share.

The balance of power is unlikely to shift quickly as this season's new phones were all made before the ruling.

Sony launched three Android phones this week at IFA, Europe's largest consumer electronics fair. Chinese phone maker Huawei launched four.

"We have made our choice," said Lars-Christian Weissewange, vice president at Huawei's phone unit, adding that consumers were making the platform choice for them by picking Android phones. Sony said the ruling was not impacting its business.

"This is probably not impacting consumer thinking," Gianfranco Lanci, chief of Lenovo's European operations, said on sidelines of the conference.

Behind closed doors
But behind closed doors, companies are looking at alternative routes should the ruling impact ripple wider out, said several industry insiders.

"Today, all Android vendors are considering their software options," said Pete Cunningham, an analyst at research firm Canalys.

Samsung's brief, surprise launch on Wednesday of the world's first smartphone running on Windows Phone 8, should be interpreted as muscle flexing, analysts said.

However, it should not be seen as a firm move away from Android as the model will likely struggle to stand out even among the other Windows phones, said Malik Saadi, analyst at research firm Informa.

Illustrating the high interest at stake are the behind-the-scene meetings of Google's and Apple's chiefs Larry Page and Tim Cook on the patents.

Despite its small market share, Windows Phone is still the largest alternative to Android as Apple and Blackberry maker RIM have not made their platforms available for other handset makers.

At the same time, vendors are pretty much stuck with Android as Windows is way behind in terms of applications on offer, offering just 100,000 apps against half a million each on Android and Apple.

"Microsoft needs to create a developer environment for the Window Phone, which is growing, but still trails behind the others," said Roberta Cozza, analyst at Gartner.

Attracting developers is difficult with tiny market shares.

Navigation firm TomTom launched an app running on Android this week but said it was not planning a Windows app.

"I have a big bucket of (research and development) and if I had to decide where to put my money, I want to wait first to see whether Windows is a success," said co-founder Corinne Vigreux.

Copyright Thomson Reuters 2012