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Microsoft’s comments on happenings outside its immediate product portfolio are rare, and all the more valuable when they do appear. Here’s one from Horacio Gutierrez, “Corporate Vice President and Deputy General Counsel”, entitled “Apple v. HTC: A Step Along the Path of Addressing IP Rights in Smartphones.”

By now, all the alarm bells should be going off: this is from Microsoft’s top intellectual monopoly bloke, writing about one of the most surprising and potentially disruptive lawsuits in the world of technology – and one that doesn’t even involve Microsoft directly. Why on earth is he doing it? Answer: because Microsoft has something very important to communicate.

He begins with a fair analysis of how the mobile market has evolved from one centred around the “radio stack”, and making calls, to the smartphone market today. Of this he says:

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Now, however, as a new category of ‘smart’ devices has emerged, the value proposition has moved to the software stack. As is clear from advertising by all of the major brands – Apple’s iPhone, RIM’s Blackberry, Palm’s Prē, Motorola’s Droid, and Windows Phones – people buy smartphones because they are fully functional computers that fit in the palm of your hand. The radio stack is still valuable, as it allows the phone to connect to the Internet. But what is most valuable is not the connection per se, but the new things that users can do with it – find nearby restaurants and movie theaters, send and receive email, and watch video, just to name a few. The primary driver for adoption and sales in this market is the software on and available for the device. Continue reading.

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