Oracle Android Patent Battle Could Hurt Google

One of the most painful memes about the Oracle vs. Google Android patent lawsuit is that if Oracle wins it could demand licensing fees based on their use of the open-source platform.

Now we have some theoretical numbers to back that notion. Network World, citing Deutsche Bank analyst Jonathan Goldberg, said Oracle could ask handset makers to license its software for $15 or $20 a phone.

The idea is that these companies would avoid paying damages by getting on Oracle’s good side and legitimately licensing the Java software used in Android.

Hard to compete with free

HTC and several others are already paying Microsoft to license technology for their Android handsets. Microsoft is currently trying to milk Samsung for Android software fees, too.

The great irony of this is that this arrangement would make the currently free, open-source Android more like Microsoft Windows Phone 7, which is struggling to gain traction.

The idea that many people are seizing on is that if this happens Android might not be as competitive with Apple iOS and other platforms. Analyst Jack Gold told Network World:

“Handset makers are going to have to think long and hard about staying on Android. Because why are they on Android? Because it’s free and it’s modifiable. If you start changing the terms, handset makers have to start looking at the business proposition.”

Indeed, a big part of Android’s appeal is its cost-effectiveness; it’s hard to compete with free, but when free turns to fee, the platform’s value takes a hit.

Moreover, for per-phone fees, Android’s ragged edges might no longer be smoothed over by the free tag. I’m thinking specifically of the gross platform fragmentation. Just see this Android Device Dashboard to see what I mean.

Let me ask readers this: If Oracle does begin to take licensing from Motorola, HTC, Samsung and others for Android, how much will Android’s smartphone market share drop?

Will we see Android dip below iOS in 2012 and become more on par with BlackBerry?