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Dude, I embrace the cloud

Microsoft is one of the major players in the customer relationship management (CRM) market where it competes with Salesforce.com, Oracle, SAP and others.

Salesforce.com currently has around 15% market share in the overall CRM market, but it is the leader in cloud based CRM. As the shift to cloud-based on-demand CRM systems becomes more prominent, it is expected to gain additional market share.

Microsoft also launched a cloud version of its Dynamics CRM suite this year, which should help it increase its market share. Microsoft announced that it has added new social features to Dynamics CRM, which should improve collaboration among sales employees and customers. ^[1]

The Dynamics business suite comes under the Microsoft Office division, which accounts for nearly 30% of Microsoft’s Trefis price estimate of $28 and is around 10% above its current market price. We expect the total revenue from Dynamics CRM and ERP to reach $2.5 billion by the end of the forecast period.

Microsoft Hopes to Boost CRM Market Share by Going Social

Microsoft has been getting aggressive in its cloud CRM business trying to undercut Salesforce.com and Oracle in a bid to gain market share. Salesforce.com recently upgraded its CRM offerings with more social features and upgraded its Chatter tool with real time chat and groups. It even acquired Assistly a social customer service startup to bolster its CRM offering.

Microsoft’s new upgrades to Dynamics CRM include activity feeds, which enable users to share and access customer details using Outlook. It will make customer data sharing more interactive and will integrate with Microsoft’s existing products. With these new social features, Microsoft aims to bridge the feature gap with Salesforce.com’s CRM offerings.

Our complete analysis for Microsoft’s stock is here

Notes:

1. Microsoft adding social features to its CRM suite, Total Telecom [?]

Like our charts? Embed them in your own posts using the Trefis WordPress Plugin.

Article source: http://www.forbes.com/sites/greatspeculations/2011/09/29/like-salesforce-microsoft-makes-crm-more-social/

September 29, 2011, 10:13 AM EDT

By Cliff Edwards, Alex Sherman and Dina Bass

(Updates shares in last paragraph.)

Sept. 29 (Bloomberg) — Microsoft Corp. plans to offer online pay television service from Comcast Corp. and Verizon Communications Inc. through Xbox Live, in an bid to channel more entertainment to its video-game console, people with knowledge of the situation said.

Microsoft, based in Redmond, Washington, is in talks with almost two dozen providers of music, sports, movies and TV shows in the U.S. and Europe, and may announce an expanded Xbox Live streaming service as soon as next week, said one of the people, who weren’t authorized to speak publicly.

Chief Executive Officer Steve Ballmer is promoting the Xbox 360 console as a way to switch easily between games, DVDs and pay TV. He said on Sept. 14 that by Christmas, Microsoft will add the Bing search engine to the Xbox and use its Kinect controller’s voice recognition to sift through shows on the Web.

“We all know the frustrations of using guides and menus and controllers, and we think a better way to do all of this is simply to bring Bing and voice to Xbox,” Ballmer said at a developers conference. “You say it, Xbox finds it.”

Microsoft also expects to sign deals with Time Warner Inc.’s HBO cable channel, Sony Pictures Entertainment’s Crackle streaming service, NBC Universal’s Bravo and Syfy channels and Lovefilm UK, a subsidiary of Amazon.com Inc., the person said.

Wayne Hickey, a spokesman for Microsoft, declined to comment, as did Bobbi Henson, a spokeswoman for Verizon, and Jennifer Khoury of Comcast, which controls NBC. Greg Belloni, a Sony spokesman, had no immediate comment. Dorothy Jean, a spokeswoman for Lovefilm, declined to comment. An HBO spokesperson declined to comment.

Pay-TV Tether

The new applications from Philadelphia-based Comcast’s Xfinity TV service and New York-based Verizon’s FiOs would require users to prove they already are pay-TV customers in regions where the services operate, two of the people said.

The Xbox 360 plays DVDs and video games, and owners can pay $60 a year for the Xbox Live premium service, which allows for multi-user play over Web. Console owners can also add subscriptions to Netflix Inc.’s and Hulu LLC’s online film and television services, and pay-TV through ATT Inc.’s U-verse in its markets.

The surge in online entertainment has thrust the Xbox 360 and its console rival, Sony Corp.’s PlayStation 3, into competition with other Web-connected devices in the home, from DVRs to television sets.

Microsoft’s Moves

Since last year, Microsoft has integrated social networking features into Xbox Live, letting viewers chat with each other while watching movies and shows. The company announced in June that 35 million people used its paid Xbox Live service around the world, spending an average of 60 hours a month playing games and watching entertainment.

Comcast had 22.5 million pay-TV customers as of June 30. Verizon Fios had 3.8 million.

Cable and satellite TV providers such as Comcast are looking to stem defections by putting their services on more devices and making it easier for them watch.

In June, Comcast CEO Brian Roberts demonstrated a TV interface called Xcalibur that uses Web-connected servers to forgo the need for a set-top box at all.

Microsoft rose 48 cents, or 1.9 percent, to $26.05 at 9:43 a.m. New York time in Nasdaq Stock Market trading. Comcast gained 44 cents, or 2 percent, to $22.44. Verizon increased 54 cents, or 1.5 percent, to $37.38 in New York Stock Exchange composite trading.

–With assistance from Ronald Grover in Los Angeles. Editors: Anthony Palazzo, Rob Golum

To contact the reporters on this story: Cliff Edwards in San Francisco at cedwards28@bloomberg.net; Alex Sherman in New York at asherman6@bloomberg.net; Dina Bass in Seattle at dbass2@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net; Tom Giles at tgiles5@bloomberg.net; Peter Elstrom at pelstrom@bloomberg.net

Article source: http://www.businessweek.com/news/2011-09-29/microsoft-said-to-add-comcast-verizon-pay-tv-to-xbox-live.html

SymbolPriceChangeN.TO9.61-0.05{“s” : “n.to”,”k” : “a00,a50,b00,b60,c10,g00,h00,l10,p20,t10,v00″,”o” : “n.to”,”j” : “”}

Microsoft (NSDQ:MSFT – News) and the device makers that have entered into patent licensing agreements with it over the Android platform have so far been mum on how much they are paying Microsoft in their settlements. But the analysts at Goldman Sachs have come out with their own estimate: in total, $444 million annually.

The research, reported today by Business Insider, says that the OEMs are paying Microsoft between $3-$6 per device. The Goldman Sachs analysts base the calculation on estimates for the number of Android-based devices that will be sold by Microsoft’s licensees between July 1, 2011 and June 30, 2012.

Those OEMs include HTC, Acer, General Dynamics Itronix, Onkyo, Velocity Micro, ViewSonic and Wistron, and Samsung, which yesterday became the ninth licensee. Motorola (NYSE:MMI – News), currently being acquired by Android’s parent, Google (NSDQ:GOOG – News), is the last remaining handset standout. Motorola is also involved in litigation with Microsoft at the moment.

As BI points out, a sum of $444 million is small potatoes for Microsoft, which analysts polled by Yahoo (NSDQ:YHOO – News) believe will make $74.5 billion in revenues this year. It will have an equally small impact on the company’s earnings per share, $0.04 on estimated EPS of $2.86.

Yet at least one person is questioning Goldman Sachs’ figures.

“Goldman Sachs’ estimate of Android patent royalties collected by MSFT is not serious analysis but more like reading tea leaves, at best,” said Florian Mueller, the writer behind the patent blog Foss Patents.

He noted that in the patent case that Microsoft has filed against Barnes Nobel, also over an Android device, BN claimed that Microsoft was demanding more for Android royalties than it was charging for a Windows Phone 7 license. That WP7 license fee, notes Horace Dediu at Asymco, is believed to be between $8 and $15 per device.

“Either GS is off base or BN lies to the courts…Or both,” noted Mueller.

Earlier this year, it was reported that Microsoft was demanding significantly more than $3-6 per device in its patent claims. A report from Reuters quoted sources saying the figure was $15 and that Samsung would probably neotiate that down to $10—still potentially more than twice the figure Goldmans has put on the royalty.

What to make of this situation? If these numbers are indeed comparable to what Microsoft is charging to license its own OS, it could be a sign that it’s not make much from that, either.

But even if the incoming revenue is small, if Microsoft can leverage those deals so that those handset makers are also entering into broader partnerships on WP7—as it has done with Samsung and HTC—then it’s a win for Microsoft regardless. In any case, if the OEM has to pay just as much to use Android as to go with a proprietary OS, it could see them thinking twice before jumping into bed with Google quite so easily.

Related

• Updated: Microsoft Lands Big Android Licensee In Samsung, Google Cries Foul
• Report: Microsoft Demanding $15 Per Android Handset From Samsung
• How Google’s Motorola Purchase Changes The Patent Balance Of Power
• Microsoft Sues Motorola Over Patent Infringement On Android Smartphones
• Motorola Hits Back At Microsoft With A Patent Suit Of Its Own

Article source: http://biz.yahoo.com/paidcontent/110929/419_more_detail_or_guesswork_on_microsofts_patent_payout_444_millionyear_id.html?.v=1

Good news from the security frontline. The phenomenon of rogue antivirus ‘scareware’ really does appear to be on the wane, at least according to figures from security company Enigma Software.

The US-based company’s statistics culled from scans and customer support reports showed a dramatic 60 percent drop in new detections this summer, with a particularly marked fall between June and July.

Running the names of two common fake antivirus products through Google’s Trend search volume tool, Enigma researchers found that searches for ‘Vista Security 2012’ and ‘XP Security 2012’ dropped equally precipitously over the same period of time.

“We’ve seen a drastic drop in scan logs from new users, support logs, detections, and support tickets from new customers. Basically, we’ve witnessed a 60 percent decline in new fake AVs, scareware, and rogue anti-virus incidents,” the company says in a blog.

Although Enigma was not able to provide absolute numbers, the drop still chimes with that noted by McAfee in August, which said it had also seen a 60 percent drop around the same time.

The drop in scareware programs is usually and probably justifiably attributed to the FBI’s Operation Trident Tribunal summer campaign against fake AV operations across the globe that saw companies raided in Latvia, the Ukraine and half a dozen other countries.

Separately in June, the head of Russian company ChronoPay, Pavel Vrublevsky, was arrested for allegedly ordering a DDoS attack against a rival firm. His company was also believed to be a conduit for the payment processing in which fake antivirus scams depend.

Another longer-term factor could simply be the growing popularity of free antivirus programs such as Microsoft’s Security Essentials, which are now sophisticated enough to detect the biggest scam programs. If people know they can download security software without paying the attraction of buying expensive – and possibly bogus – programs declines too.

If scareware is under serious pressure that might explain a recent tendency of scareware programs to adopt a more threatening tone, sometimes using the impersonation of real organsiations.

In a recent example, infected Windows users were accused of running pirated versions of the OS, with users unwilling to pay a sum of money to a company claiming to represent Microsoft being threatened with de-activation.

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In another slightly different incarnation, criminals impersonated the UK’s Metropolitan Police in an attempt to lever money from victims accused of visiting extremist and porn websites. There could be more of this to come.

Earlier this year, the first Mac fake antivirus program was discovered.

Article source: http://rss.feedsportal.com/c/270/f/470440/s/18f09138/l/0Lnews0Btechworld0N0Csecurity0C330A70A610Cfake0Eantivirus0Escareware0Escams0Eshow0Ebig0Esummer0Edecline0C0Dolo0Frss/story01.htm

BERLIN — Reviving arguments that have dogged Microsoft in Europe for nearly two decades, an Italian software maker is asking European officials to block Microsoft’s $8.5 billion purchase of Skype, the Internet phone service, unless it is removed from Microsoft’s ubiquitous Windows Office platform.

In the past, the European Commission has been sympathetic to complaints about Microsoft’s strategy of “bundling” popular applications with Windows, eventually requiring the software maker to make concessions on its media player and Internet browser.

But legal experts were split over whether the latest complaint, filed Sept. 20 by Messagenet, a company based in Milan that is a rival to Skype Internet’s phone service, would complicate or prevent European approval of the takeover, which would be the largest in Microsoft’s history and the largest takeover in the technology sector this year.

“These types of complaints from competitors are to be expected,” said Denis Waelbroeck, an antitrust lawyer at Ashurts in Brussels. “I would expect that the commission will look at this seriously, but I think that in the end, the officials will reach their own independent decision. This doesn’t mean the complaint will be upheld.”

Joaquín Almunia, the E.U. competition commissioner, plans to make his decision on the acquisition public on Oct. 7. A spokeswoman for Mr. Almunia, Amelia Torres, on Wednesday declined to comment on Messagenet’s complaint. In general, she said the commission considered all submissions from competitors in antitrust cases.

Mr. Almunia, a Spanish economist, had been competition commissioner for less than two months when his office approved Microsoft’s takeover of Yahoo’s search business in February 2010. A Brussels antitrust lawyer, who did not want to be identified for fear of alienating a potential client in Microsoft, said the Italian complaint could scupper the deal.

“I would certainly say this kind of complaint, if it raises new issues that the commission has not previously considered, may derail the deal or, at least delay approval,” the lawyer said. Mr. Almunia could be persuaded to extend his present review into a more exhaustive second phase, which could take months or even years.

Or, the lawyer said, Microsoft could seek to delay an immediate decision and buy time by requesting an extension to prepare an answer to the complaint. Jesse Verstraete, a spokesman for Microsoft in Brussels, said the company declined to comment on the allegations in the complaint from Messagenet.

“The proposed acquisition is still undergoing regulatory review and we are working closely with the agencies,” Mr. Verstraete said. “Until all regulatory approvals are obtained, it is business as usual at Microsoft and at Skype.”

Besides asking Microsoft to “unbundle” Skype from Windows, Messagenet is urging European competition authorities to require Microsoft to effectively open Skype’s Internet phone network, which had 124 million regular users in June, to the services of rivals. Messagenet is asking the commission to do this by requiring Microsoft to disclose the confidential computer coding that would enable rival services to connect calls to Skype users.

Skype’s communication software does not operate with rival services. In May, after Microsoft announced its plans to buy Skype, the managing director of Messagenet, Andrea M. Galli, said he had written to Skype requesting the secret coding that would let the services interconnect, according to a copy of the complaint that Messagenet filed with the commission, and which was seen by the International Herald Tribune.

Mr. Galli said Skype never responded to the request.

Less than three weeks later, Skype ended its partnership with Digium, a company based in Huntsville, Alabama, whose software had enabled users of an open-source Internet phone service, Asterisk, to call and be called by Skype users.

At that time, a Digium product manager, Rod Montgomery, lamented in a company blog that Skype for Asterisk, the Digium software, had been a “strong and steady seller.”

Article source: http://www.nytimes.com/2011/09/29/technology/italian-software-maker-contests-microsofts-purchase-of-skype.html?partner=rss&emc=rss

Microsoft has signed a cross-license patent agreement with Samsung Electronics that grants Microsoft royalties from Samsung’s Android-based smartphones and tablets, Microsoft said in a statement on Wednesday.

Microsoft didn’t disclose details on how much money Samsung will have to pay Microsoft for every Android-based device it sells. Last year, HTC, which together with Samsung dominate the market for Android-based smartphones, also signed a licensing deal with Microsoft.

In the past three months, Microsoft has signed Android deals with Acer, General Dynamics Itronix, Onkyo, Velocity Micro, ViewSonic and Wistron, Microsoft’s general council Brad Smith and deputy general council Horacio Gutierrez wrote in a blog post.

That leaves Motorola Mobility, with which Microsoft is currently in litigation, as the only major Android smartphone manufacturer in the U.S. without a license, they said.

It seems unlikely that Microsoft and Motorola Mobility will agree on a licensing deal without litigation. Motorola Mobility is in the process of being acquired by Google. “Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies,” Google CEO Larry Page said about the US$12.5 billion acquisition.

Smith and Gutierrez had this message for Google in their blog post: “We recognize that some businesses and commentators — Google chief among them — have complained about the potential impact of patents on Android and software innovation. To them, we say this: look at today’s announcement. If industry leaders such as Samsung and HTC can enter into these agreements, doesn’t this provide a clear path forward?”

Samsung signing a deal with Microsoft makes more sense. The company is already busy battling with Apple in courts around the world. Samsung did not reply to questions about the deal.

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Also, earlier this week, Samsung announced the Omnia W, its first smartphone based on Windows 7.5, also known as Mango. In addition to the licensing deal, the companies also agreed to cooperate in the development and marketing of Windows Phone, Microsoft said on Wednesday.

Samsung and HTC are close partners to Microsoft, so signing licensing deals make their lives easier, according to Francisco Jeronimo, research manager at IDC.

But, on Tuesday, Samsung joined Intel to help develop Tizen, a new OS that merges MeeGo and Limo. So the company is keeping its options open when it comes to OSes.

Article source: http://rss.feedsportal.com/c/270/f/470440/s/18ee655f/l/0Lnews0Btechworld0N0Cmobile0Ewireless0C330A6970A0Cmicrosoft0Ereaches0Eandroid0Elicensing0Edeal0Ewith0Esamsung0C0Dolo0Frss/story01.htm

Models hold Samsung Androids. (AP Photo/Lee Jin-man)

Microsoft has inked a patent-licensing deal with Samsung that covers smartphones and tablets running Android, adding the Korean outfit to the growing list of Android manufacturers that are paying Redmond to use Google’s mobile operating system.

On Wednesday, Microsoft and Samsung announced an agreement to cross-license each others’ patent portfolios, with Samsung paying Microsoft a portion of the royalties on Android devices and agreeing to expand its development of Windows phones.

“Microsoft and Samsung see the opportunity for dramatic growth in Windows Phone and we’re investing to make that a reality,” said Andy Lees, the president of Microsoft’s Windows Phone Division, said in a statement. “Microsoft believes in a model where all our partners can grow and profit based on our platform.”

Android has come under heavy fire over the last year from numerous patent-wielding Google competitors, including Oracle, Apple, and Microsoft. In response, Google has scrambled to expand its own patent portfolio, acquiring over two thousand patents from IBM and agreeing to purchase device manufacturer Motorola Mobility and its patents.

But Microsoft has already had quite a bit of success negotiating patent deals with Android manufacturers. HTC – the world’s largest Android OEM, according to Nielsen – is on the list. So to are Acer, Viewsonic, Wistron, and Onkyo.

“This is the same tactic we’ve seen time and again from Microsoft,” Google said in a canned statement sent to Wired. “Failing to succeed in the smartphone market, they are resorting to legal measures to extort profit from others’ achievements and hinder the pace of innovation. We remain focused on building new technology and supporting Android partners.”

Microsoft didn’t shy away from these jabs. Frank X. Shaw – the company’s rather vocal vice president of corporate communications – appeared on Twitter with a jab of his own: “Let me boil down the Google statement …from 48 words to 1: Waaaah.”

Shaw also pointed to a blog post from Microsoft general counsels Brad Smith and Horacio Gutierrez. “If industry leaders such as Samsung and HTC can enter into these agreements,” Smith and Gutierrez said, “doesn’t this provide a clear path forward?”

Article source: http://www.wired.com/wiredenterprise/2011/09/microsoft-samsung-aim-google-insults/

Microsoft Corp. plans to offer
online pay television service from Comcast Corp. (CMCSA) and Verizon
Communications Inc. (VZ) through Xbox Live, in an bid to bring more
entertainment to its video-game console, people with knowledge
of the situation said.

Microsoft, based in Redmond, Washington, is in talks with
almost two dozen providers of music, sports, movies and TV shows
in the U.S. and Europe, and may announce an expanded Xbox Live
streaming service as soon as next week, said one of the people,
who weren’t authorized to speak publicly.

Chief Executive Steve Ballmer is promoting the Xbox 360
console as making it easier to switch between games, DVDs and
pay TV. He said on Sept. 14 that by Christmas, Microsoft will
add the Bing search engine to the Xbox and use its Kinect
controller’s voice recognition to sift through shows on the Web.

“We all know the frustrations of using guides and menus
and controllers, and we think a better way to do all of this is
simply to bring Bing and voice to Xbox,” Ballmer said at a
developers conference. “You say it, Xbox finds it.”

Microsoft also expects to sign deals with Time Warner
Inc. (TWX)’s HBO cable channel, Sony Pictures Entertainment’s Crackle
streaming service, NBC Universal’s Bravo and Syfy channels and
Lovefilm UK, a subsidiary of Amazon.com, the person said.

Wayne Hickey, a spokesman for Microsoft, declined to
comment, as did Bobbi Henson, a spokeswoman for Verizon, and
Jennifer Khoury of Comcast, which controls NBC. Greg Belloni, a
Sony spokesman, had no immediate comment. Dorothy Jean, a
spokeswoman for Lovefilm, declined to comment. An HBO
spokesperson declined to comment.

Pay-TV Tether

The new applications from Philadelphia-based Comcast’s
Xfinity TV service and New York-based Verizon’s FiOs would
require users to prove they already are pay-TV customers in
regions where the services operate, two of the people said.

The Xbox 360 plays DVDs and video games, and owners can pay
$60 a year for the Xbox Live premium service, which allows for
multi-user play over Web. Console owners can also add
subscriptions to Netflix Inc. (NFLX)’s and Hulu LLC’s online film and
television services, and pay-TV through ATT Inc.’s U-verse in
its markets.

The surge in online entertainment has thrust the Xbox 360
and its console rival, Sony Corp. (SNE)’s PlayStation 3, into
competition with other Web-connected devices in the home, from
DVRs to television sets themselves.

Microsoft’s Moves

Since last year, Microsoft has integrated social networking
features into Xbox Live, letting viewers chat with each other
while watching movies and shows. The company announced in June
that 35 million people used its paid Xbox Live service around
the world, spending an average of 60 hours a month playing games
and watching entertainment.

Comcast had 22.5 million pay-TV customers as of June 30.
Verizon Fios had 3.8 million.

Cable and satellite TV providers such as Comcast are
looking to stem defections by putting their services on more
devices and making it easier for them watch.

In June, Comcast CEO Brian Roberts demonstrated a TV
interface called Xcalibur that uses Web-connected servers to
forgo the need for a set-top box at all.

Microsoft fell 9 cents to $25.58 in Nasdaq Stock Market
trading. Comcast lost 33 cents to $22. Verizon slid 5 cents to
$36.84 in New York Stock Exchange composite trading.

To contact the reporters on this story:
Cliff Edwards in San Francisco at
cedwards28@bloomberg.net;
Alex Sherman in New York at
asherman6@bloomberg.net;
Dina Bass in Seattle at
dbass2@bloomberg.net

To contact the editors responsible for this story:
Anthony Palazzo at
apalazzo@bloomberg.net;
Tom Giles at
tgiles5@bloomberg.net;
Peter Elstrom at
pelstrom@bloomberg.net

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Article source: http://www.bloomberg.com/news/2011-09-29/microsoft-is-said-to-plan-xbox-live-expansion-with-comcast-pay-tv-service.html

Microsoft and Samsung, amid a rash of patent infringement suits by technology firms, announced an agreement on Wednesday to cross-license their patent portfolios.

The US software giant said the deal with the South Korean electronics titan provides “broad coverage for each company’s products.”

The Redmond, Washington-based Microsoft said it will receive royalties for Samsung’s mobile phones and tablets running the Android mobile platform from Google.

Microsoft has accused Android, which is offered free to smartphone and tablet manufacturers by Google, of violating patents held by the US software giant.

Samsung’s Galaxy Tab tablet computer is powered by Android and is under attack from Apple, maker of the iPad, for patent infringement on several continents.

Apple is also involved in patent infringement lawsuits with Taiwan’s HTC, which also uses Android to power its mobile devices.

Google reacted sharply to the announcement that Samsung had agreed to pay royalties to Microsoft over Android.

“This is the same tactic we’ve seen time and again from Microsoft,” Google said in a statement.

“Failing to succeed in the smartphone market, they are resorting to legal measures to extort profit from others’ achievements and hinder the pace of innovation,” Google said.

“We remain focused on building new technology and supporting Android partners,” the Mountain View, California-based company said.

Under the agreement, Microsoft and Samsung will also cooperate in the development and marketing of Windows Phone, Microsoft’s mobile operating system.

“Microsoft and Samsung see the opportunity for dramatic growth in Windows Phone and we’re investing to make that a reality,” said Andy Lees, president of Microsoft’s Windows Phone Division.

“Through the cross-licensing of our respective patent portfolios, Samsung and Microsoft can continue to bring the latest innovations to the mobile industry,” said Hong Won-Pyo, Samsung’s executive vice president of global product strategy.

Article source: http://news.yahoo.com/microsoft-samsung-patent-licensing-deal-215932872.html

Jeff Bezos introduces the Kindle Fire

Microsoft recently released the Developer Preview of Windows 8, the latest version of its Windows OS. The other major players in the tablet market are Google’s Android and Apple’s iOS.

Apple’s iPad clearly dominates the tablet market and Google hasn’t been able to capture significant market share because Android OS on tablets hasn’t yet matured as a platform and has only a fraction of the total tablet apps that iOS does.

Hewlett-Packard recently announced that it wouldn’t go forward with webOS development and the TouchPad, and RIM’s Playbook is in dire straits.

Which is why, if Microsoft moves quickly with the Windows 8 launch, it stands to capture a significant share of the still nascent tablet market which is growing at a very fast pace. However, there may be one major impediment to Microsoft’s plans, Amazon’s Kindle Fire which was announced today.

We currently have a $28 Trefis price estimate for Microsoft, which implies a 10% upside to the current market price. Windows OS is one of Microsoft’s largest businesses, contributing nearly 25% to its Trefis price estimate.

How Amazon’s New Tablet Could Disrupt Microsoft’s Tablet Plans

Android hasn’t been able to crack the tablet market precisely because most Android tablets are priced much higher than the iPad and offers less in terms of user experience and an app library. As the success of the Barnes Noble Nook proved, there is a huge market for a $250 Android tablet even if it may not be as good as the iPad.

Amazon’s new Android tablet will be reportedly priced at $199, which is less than half the price of the iPad. Amazon may bundle it with the Amazon Prime service, which makes it an even better purchase.

It will sport some really good hardware, much better than the first generation of tablets. Despite this, Amazon will be able to price its Android “Kindle Fire” tablet at a very low price point and perhaps sell them at a loss because it expects to make money not by selling tablets, but by selling content on those tablets. It did it once with the Kindle, and it is very well positioned to do it again.

In comparison, Microsoft’s tablets are expected to be priced higher than the iPad, thanks to the more expensive hardware and Microsoft’s Windows 8 license fee of around $50 for tablets. Besides, Windows 8 will be launched around the end of 2012 giving Amazon more than a year to capture the low end of the market and possibly even the high end with the rumored second Android tablet, which will compete in the premium segment with other Android tablets, the iPad and Windows 8 tablets.

The Amazon Android tablet could be the biggest threat to Microsoft’s tablet plans.

Article source: http://www.forbes.com/sites/greatspeculations/2011/09/28/amazon-kindle-fire-puts-heat-on-microsoft/