Apple’s Not so Secret War

| Analysis

Motorola has filed a new lawsuit in the Southern District of Florida, in addition to its previous complaint against Apple. Included in the new suit are complaints about Apple’s iCloud and the iPhone 4S that couldn’t be added to the previous suit, according to Florian Mueller at FOSS PATENTS.

The Google acquisition of Motorola is not yet complete. Even so, the agreement with Google stipulates that Motorola cannot start a new lawsuit with out Google’s blessing. Mr. Mueller concluded that Google must have authorized this new action. Why the second lawsuit? Mr. Mueller explains:

“As I mentioned before, Motorola would have preferred to add the iPhone 4S and the iCloud to the list of technologies accused in an action that started in late 2010. However, that litigation is already far along, with a trial scheduled for this summer, and the judge rejected Motorola’s supplemental infringement contentions as untimely but said that MMI [ Motorola Mobility, Inc.] would be free to accuse those technologies in a separate lawsuit.”

Google is pouring on the coals.

This is War

Aircraft carrierWe know that Apple has gone thermonuclear against companies that it feels have infringed on its patents related to iOS, the iPhone, the iPad, etc. Apple may have even spent US$100 million to date on this litigation. Even if the rumor isn’t true, we can surmise that Apple is spending a huge amount of money on these cases.

What may be happening is this. Back when Apple was niche player, the whole PC and phone community got along fairly well. There were occasional spats, but the general tenor was that they were all in a very large market, big enough for everyone. Dell, HP, Lenovo, Toshiba, Asus and others merrily sold PCs and carved out their markets. A billion feature phones were sold every year, and companies that made mobile phones had their regional strengths.

Apple was niche player with a UNIX operating system and a few percent of the market. It wasn’t a major player.

All of a sudden, Apple burst on the scene in 2007 with an insanely popular smartphone and a new OS, iOS, that formed the basis for a tablet that would eventually come to greatly upset the applecart. PC sales were threatened. Companies that had the phone market to themselves, like RIM, Palm and Nokia were suddenly threatened.

Apple did what Steve Jobs and Tim Cook have said they would do: vigorously defend their intellectual property. As a result, the rest of the industry was stunned and annoyed with Apple. First because Apple doesn’t play nice with other competitors, second because Apple keeps the whole pie, and finally because Apple was for the first time hurting their business. The happy family concept of “I’ll help you make money if you help me make money” was being undermined.

So Apple, a company that had been an easy pushover before, has become a major irritant and is threatening to completely own the tablet revolution. The rest of the industry can’t let that happen, and so is fighting like mad. It’s like WWII and Pearl Harbor. Without assigning corporate sides here, one country starts a preemptive strike and tries to win on the first blow, demoralize the enemy, and run the table in the South Pacific. The defender, mad as hell, fights back, blunts the enemy in the Coral Sea and wins the next round at the Battle of Midway, buying time to build up its forces.

This is why Apple seems to be meeting so much strong, imaginative resistance. The various companies are running up huge legal fees because the stakes are high. Plus, all sides are taking both tactical and strategic approaches. Some tactical losses may turn out to be strategic wins such that the defender is left spent and weary. New vulnerabilities are exposed.

I think this is going to go on for a long time. Some have said the warriors will tire of the battle and settle everything with license fees. And that may happen in on a case-by-case basis. But Apple’s earnings report yesterday suggests that this $415 billion dollar company with $150 billion in annual revenue and nearly $100 billion in cash and securities isn’t done yet. It wants to run the table, and the only possible response by the defenders is to put up major resistance in the courts, buy time, and figure out what to do next.

If they can.

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Photo credits: Shutterstock & iStockPhoto

Comments

NEALC5

Why is it that some people see Apple as a “bully” for defending their intellectual property? How is that somehow wrong?

John Martellaro

NEALC5:  Of course. Apple’s competitors aren’t accustomed to this kind of vigorous defense from Apple—a defense that’s completely natural and justified. Nor are they accustomed to bearing the burden of the legal defense.

However, if Apple’s opponents can characterize that as bullying, they can gain sympathy with their own customers. It’s all part of the war strategy.

b0wz3r

It’s not.  They’re only PO’d because they got beat at their own game, and were totally blindsided in the process by a company that no one perceived as a threat.  That’s why they’re so PO’d, because of their own shortsightedness on this issue, and that Apple has changed how their tactics now.  Apple learned a hard lesson in computer OS’s, and seems determined not to repeat that same mistake, and no one expected them to do that.

Phil

I am personally glad that apple is doing this. With everyone working together in the industry well, there is no competition, and therefore non-competitively priced items. The more competition, the better for the customers.

Bosco (Brad Hutchings)

I really have no idea how any intelligent person who is familiar with the ethical gymnastics Mr. M?eller did over SCO and his published opinions can take anything he says without evaluating what his angle might be and how he expects to get paid.

For example, take this wonderful piece of astroturf solicitation he addressed to independent developers dealing with complaints from patent troll Lodsys. Not only is it terrible advice, it just encourages a patent troll. There is no point in offering it publicly other than to solicit Lodsys as a new client for astroturfing services.

RonMacGuy

Poor Florian.  Not even here to defend himself!!  Too busy being successful, I guess.

Bosco (Brad Hutchings)

You guys used to get totally bent out of shape when Rob Enderle did the same thing: fronting for paying clients as “an expert” offering his “analysis”. But whatevers. Company you keep and all that. John seems too thoughtful to self-sully by using Florian as even a conversation starter, let alone a valued opinion.

Lee Dronick

“I wish to have no connection with chips that are not fast for I intend to go in harm’s way.”

John Paul Jones

So Apple, a company that had been an easy pushover before, has become a major irritant and is threatening to completely own the tablet revolution. The rest of the industry can?t let that happen, and so is fighting like mad. It?s like WWII and Pearl Harbor. Without assigning corporate sides here, one country starts a preemptive strike and tries to win on the first blow, demoralize the enemy, and run the table in the South Pacific. The defender, mad as hell, fights back, blunts the enemy in the Coral Sea and wins the next round at the Battle of Midway, buying time to build up its forces.

In the end it was a war of attrition and blockade. We had material resources and industrial capability and built a hundred aircraft carriers during the war, Japan built one and could no longer import oil to run their war machine. Apple has touch screens and RAM supplies cornered, not to mention a cachet that only neckbeards seem to disrespect.

John Dingler, artist

They burned Joan of Arc because she showed up the grizzled knights that actually killing the enemy, rather than merely fighting in genteel fashion, won the war.

Resentful at Apple’s surprising success, they are trying to kill Jobs’s upstart company.

geoduck

In a war one side or the other may prevail but nobody besides the undertakers win.

In this war all sides will lose except the lawyers. Eventually they will settle, but then that’s something that they could do now.

iJack

They burned Joan of Arc because she showed up the grizzled knights that actually killing the enemy, rather than merely fighting in genteel fashion, won the war.

No they didn’t.  Your analogy is dreadful, and wrong.

It was a politically motivated trial for sure, but the charge had nothing to do with her short military career, for which she was universally lauded.  She was tried in an ecclesiastical court for heresy by her actual enemies (England), but executed by her own (France).  In the end, they got her for wearing men’s clothes, and having short hair.

alsomal

please look from my side of the argument then make your own conclusion i have been using PC since the early 90’s when i run away from the war in Somalia, never a Mac then i got the iPhone then the iPad and finally i just bought the Mac from Regent Street yesterday, i didn’t realise before yesterday what i was using was a trash, companies like Apple should be protected because they innovate unlike all these copy cat companies.

using the Mac is a experience of a life time using the average PC is like going to your 9/5 boring job, you just want give-up.

Lee Dronick

Thank you Alsomal

Paul Goodwin

LOL Lee on the neckbeard

zewazir

Here is what has Apple competitors so up-in-arms:
http://www.macobserver.com/tmo/article/iphone_4_4s_ipad_dominate_enterprise_activations_in_4q11/

Prior to iPhone/iPad, Apple was seen not only a a niche player, but specifically a strictly consumer-oriented company.  They did not worry about Apple’s dominance in MP3 players, with the iPod, because that did not infiltrate into the world of business.

Now, Apple is taking their products into industry, a market previously shunned by Apple. People in business are buying Apple products by the pallet load - and loving the results. And people whose market share was built on supplying industry are wondering: will there be a resulting halo effect, as there was with iPod and personal home computers?

Lee Dronick

Check out this smear piece over at the Huffington Post, you would think that only Apple has stuff built in China. I wonder who is behind it Google, Samsung, Dell?

http://www.huffingtonpost.com/2012/01/26/apples-china-ipad-human-costs_n_1232890.html

Bosco (Brad Hutchings)

[oops: I was commenting on the wrong article.]

vpndev

You guys used to get totally bent out of shape when Rob Enderle did the same thing: fronting for paying clients as ?an expert? offering his ?analysis?.

I still do. Fortunately there seems to be much less demand for his “opinion” these days. About time, too !

Paul Goodwin

Check out this smear piece over at the Huffington Post, you would think that only Apple has stuff built in China. I wonder who is behind it Google, Samsung, Dell?

At least in the real article they name all the others doing business in China. It’s kind of amazing how up in arms people get when they see stuff like that happening. The same people probably gripe about too much gov’t regulation of business, OSHA, Unions. They’re so shocked when it happens because they can’t fathom how bad it must really be - it’s not our world. I think Apple (and the others) got blind sided the same way - not imagining that unscrupulous Chinese capitalists would behave the same way ours did in the late 1800s. At least Apple set up an audit program, but without regulations over there, it’ll still happen.

wab95

John:

Picking up on your WWII Pacific engagement theme provides an opportunity to have a bit of fun.

It is not too much of a stretch, not assigning identities mind you, to see one company (call it ‘Company Alpha’) pursuing its own agenda (making its own products) when, out of the blue, another company (Company Bravo), posing if not as an ally at least as a non-hostile, surreptitiously and through espionage and alleged IP (code) theft, amassing a counter weapon and launching an unprovoked and unexpected (using 1941 vernacular, ‘sneak’) attack, that catapulted Company Bravo into a seemingly unassailable market share lead, leaving Alpha seemingly in flames, and facing the prospect of being (and not for the first time) reduced to an ‘also ran’ niche status.

Again, not calling any names or assigning any identities, it is not too much of a stretch to see a resurgent market share from Company Alpha in a recent quarter as somewhat of a possible Midway, a turning point of sorts.

Professor Lyman at the Navel Postgraduate School defines a superpower as

a country that has the capacity to project dominating power and influence anywhere in the world, and sometimes, in more than one region of the globe at a time, and so may plausibly attain the status of global hegemony

.

Altering that definition slightly, one can replace country with ‘company’, and region with ‘industry’, and define a corporate superpower as ‘a company that has the capacity to project dominating power and influence anywhere in the world…in more than one industry at a time…’. If so, one can argue that Apple has emerged, in the second decade of the 21st Century, and out of the welter of its corporate battles, as a corporate superpower, with one massive war chest and an arsenal of hardware that can be deployed to over 90 theatres simultaneously - all with supply line support.

Furthermore, not unlike nation states, Apple can pursue its objectives with multiple options and on multiple fronts, including the courts and the marketplace. From my vantage point, admittedly limited, it appears that Apple’s litigation efforts put a drag on their competitors’ developments, both by causing them in some cases to retool their hardware (Samsung’s Galaxy Tab) and possibly misdirecting their attention from where Apple are really headed until it’s too late (e.g. ecosystem deployment for OS X and iOS devices).

In any case, given its momentum, and its string of successes in both the individual consumer and enterprise spaces, Apple shows every sign of putting even more pressure on the competition, and no sign of letting up - a recipe for turning the tide.

If rumours are to be believed, I can’t wait to see what happens when Apple roll out their triple threat of the iPhone 5, the iPad 3 and the Apple TV later this year.

Lee Dronick

At least in the real article they name all the others doing business in China.

Yes, they named all the players. The Huffington Post had a headline on the home page that implied it was only Apple. Of course if they put some other tech company in the headline then few people would click through, they did it for page hits. Scroll down and read the comments from Apple bashers who posted using Chinese, if not Foxconn, manufactured devices.

John Martellaro

wab95.  Fabulous stuff there. I love it. Thanks.

Paul Goodwin

Lee - yeah, that Huffington Post site is all about dredging up conflict and page hits.

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