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How is Android affected by the Microsoft-B&N team up?

by Kristen Nicole

Google’s continued success with the Android mobile operating system has only made it a target for its biggest rivals. Microsoft is hoping to kill two birds with one stone, investing $300 million into Barnes & Noble’s digital division, Newco, for a 17.6 percent stake. The end goal is to integrate Nook’s e-reader application with Microsoft’s Windows 8 platform which could eventually lead to a tablet team-up. That would be news for Android, the OS currently powering Nook tablets.

The deal between Microsoft and Barnes & Noble comes at a surprising time, considering the two companies were in a legal feud over the Nook’s alleged patent infringement just weeks ago. Like other Android-powered devices, Microsoft was said to be “bullying” OEMs over patent use, typically resulting in a royalty-bearing licensing deal under Microsoft patents. It seems Microsoft’s $300 million investment has resolved their patent litigation, as Newco will in fact have a license under Microsoft’s Nook patents.

It’s a bold move against Android, which has seen its biggest tablet success with Amazon’s Kindle Fire, the Nook competitor for the consumer-friendly e-reader market. The Kindle Fire makes up more than half of Android’s U.S. tablet market, according to a comScore report released last week.

Project Oscar could stifle other mobile payment services

Android has seen success by partnering with a range of device makers and carriers, but as competition increases, Android’s rivals are consolidating efforts against them. While Microsoft takes a strategic interest in Barnes & Noble, Google’s mobile payment initiative is threatened by a proposed joint venture between Britain’s biggest mobile phone operators. Google and PayPal have warned Brussels officials that “Project Oscar,” a tie up with Vodafone, Telefonica’s O2 and Everything Everywhere (the merged UK business of Deutsche Telekom and France Telecom), will stunt innovation and choke the competition.

It’s the U.S. businesses that seem most concerned about the market power Project Oscar could wield in taking control over the key use of a microchip used for mobile payments. As Google Wallet emerges on a slew of Android devices and PayPal looks to tap a quickly growing mobile market, the tech behind mobile payments’ necessary infrastructure will determine the power players in this sector. This intercontinental battle revolves around a phone’s SIM card, which is ultimately controlled by mobile operators.

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