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Smartphone vendors are stepping up their efforts to dethrone Google (NASDAQ:GOOG) Android OS phones from their wide lead in market share. The company claimed earlier that it has faced a “hostile, organized campaign,” involving “bogus” patent infringement claims from rivals Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Oracle (NASDAQ:ORCL), and others. Google’s Chief Legal Officer added that the only motivation for these companies in filling lawsuits was to raise the end-cost of Android products.
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Smart phones that run on Google’s Android OS platform accounted for 48% of global shipments in the second quarter this year, a rise in volume of 370% YoY from last year’s second quarter. Apple (NASDAQ:AAPL) iPhone (#2 in market share) held a 20% share of global shipments, limited in its scale compared to Google due to the fact that it is the only distributor of the iPhone, where Google distributes phones through a number of vendors. Research in Motion (NASDAQ:RIMM) (#3) continues to struggle, with market share falling to 12%, down from 33% last year, in North America. Google’s wide lead in the smartphone market has already made it a target for competitors.
Last month in Nortel’s patent auction, Google made an early bid to acquire a large number of the 6,000 patents on sale, which was quickly countered by a group of companies including Apple, Nokia (NYSE:NOK), Research in Motion (NASDAQ:RIMM), Microsoft, and others. The group of bidders not including Google was eventually awarded the entire portfolio for $4.5 billion in cash, while the Mountainview, CA based search engine operator was left in the dust with nothing. Recently Google expressed an interest in acquiring mobile R&D company Interdigital (NASDAQ:IDCC), which also has a highly valuable patent portfolio, only to have Apple jump into the fray and express its own interest shortly thereafter.
Regardless of Google’s feelings of victimization, patent disputes have become commonplace among competitors in the smartphone wars. Last week Kodak (NYSE:EK) and Samsung decided to file suits against each other for patents over camera phone technology. Apple has also been an adamant prosecutor of Samsung and Motorola (NYSE:MMI) in the past six months, looking to land a number of injunctions on the competitor’s smart phone products through infringement claims. The two companies have also filed countersuits against Apple. Google (NASDAQ:GOOG) may just have to learn to deal with the adversity that comes with leading such a hotly competitive, and profitable market.
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