Android Has Gained in Europe But Patent Wars Loom Large

While Google (NASDAQ:GOOG) has reasons to celebrate as Android’s European market share jumped from 6% in July 2010 to over 22% in July 2011, ^[1] the current string of lawsuits between Apple (NASDAQ:AAPL) and Samsung in the region can make this short-lived and represent a negative consequence of the intense competition as now legal tussles are getting in the way of innovation, which could ultimately hurt customers. In the mobile operating system (OS) market, Google competes with other tech giants such as Apple, Microsoft (NASDAQ:MSFT), Nokia (NYSE:NOK) and Research in Motion (NASDAQ:RIMM).

We currently have a price estimate near $600 for Google’s stock, which is roughly 15% above the current market price.

So Far So Good, But Apple’s Lawsuits Still Raging

According to comScore, HTC and Samsung occupy about two-thirds of all Android phones across the leading European markets, namely France, Germany, Italy, Spain and the United Kingdom with market shares of 34.6% and 31.7% respectively. Another interesting point lies in the fact that except for the UK, Samsung is significantly above HTC in the other 4 markets, occupying over 32%-42% of Android’s total share.

And that’s where the threat lies for Google. The same patent wars, which led Google to buy Motorola Mobility are raging on in Europe. Lately, Apple forced a ban on the sale of Samsung’s Galaxy Tab 10.1 in Germany, which effectively bans the Android 3.2 Honeycomb OS as well. ^[2] Even as this has yet to sink in, Apple has filed another patent infringement suit on Samsung in Britain, ^[3] seeking to ban sales of both its Android-based tablets and smart-phones. Samsung is not too far either, filing a lawsuit against Apple in France over its iPhone and iPad, alleging that Apple is infringing on three mobile phone patents. ^[4]

Amidst this continuous bickering of lawsuits and counter-lawsuits, the Android OS stands to lose out if it faces another ban similar to the one in Germany, especially considering that Samsung represents roughly a third of Android’s total share in these countries. What is even more worrying is the impact this can have on the global smart-phone industry.

Innovation takes a back seat when the biggest companies are gunning for litigation and bans on competitors based on existing patents. One cannot help but wonder whether this strategy of “mutually assured destruction” would end up hurting the consumer in the end.

See our complete analysis for Google’s stock

1. comScore: Android Captures #2 Ranking Among Smartphone Platforms in EU5 [↩]
2. Apple Wins Permanent Ban On Samsung Galaxy Tab 10.1 in Germany [↩]
3. Apple Strikes Back at Samsung, Sues in UK [↩]
4. Latest Samsung Lawsuit Targets Apple’s iPhone, iPad in France [↩]