Microsoft Corporation (NASDAQ:MSFT) is pulling all stops to become a better business – if possible, the most profitable tech company. But you known, in business, you are at peace when competing with weaker opponents. So then, some competitors are trying to cut the Windows-maker down to size, or better yet, prevent its strong emergence as a business – or so it seems.
Mobile handsets makers in China such as Hauwei and ZTE Corp. are raising concern over the deal that Microsoft Corporation (NASDAQ:MSFT) and Nokia Corporation (NYSE:NOK) reached around September last year. The two companies agreed to an acquisition deal in which Microsoft Corporation (NASDAQ:MSFT) will inherit Nokia’s devices and services division – the arm of the Finnish company that makes mobile phones.
Fear for higher patent fees
The handset makers have reportedly now raised their grievances with Chinese Ministry of Commerce, out of concerns that the Microsoft-Nokia deal will lead to higher fees on patents held by the two companies and that will make their business less competitive. Thus, they want Chinese authorities to place a cap on how far Microsoft Corporation (NASDAQ:MSFT) and Nokia can go in raising royalties on their mobile communication technology patents.
The talks around the concerns of the $7.4 billion deal between Microsoft Corporation (NASDAQ:MSFT) and Nokia and the possibility of that deal leading to higher cost for handset makers first surfaced last year around December. At that time Hauwei and ZTE Corp. were the only big names gripped with fear.
Rivals seize opportunity to raise obstacles
However, now Google Inc (NASDAQ:GOOD) and Samsung Electronics are said to have joined forces with Chinese mobile phone makers in expressing concerns over possible hike in patent royalties.
A lot could be made out of the ongoing chatter over Microsoft-Nokia deal. Yet, what is very clear is that as Microsoft Corporation (NASDAQ:MSFT) enters phone making business, rivals are worried it might dry their port. Thus raising obstacles on its path seem to be the immediately available ammunition.
Since Nokia boasts one of the richest mobile technology patents portfolio, raising licensing fees on the same for Microsoft Corporation (NASDAQ:MSFT) rivals and reducing fees on the same for Microsoft will obviously hurt Samsung, ZTE Corp., Hauwie and other phone makers.
Still Microsoft Corporation (NASDAQ:MSFT) might also want to temper with the royalty rates on Android in order to get rivals onto uncomfortable corner. But all this is business. After all, Microsoft Corporation (NASDAQ:MSFT) has the commitment to maximize value for its shareholders.
