HTC Sues Apple with Patents Bought from Google

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A new salvo has been fired in the Apple Patent Wars, as HTC filed a new lawsuit against Apple Inc. based on patents purchased from Google on August 29th of this year. The company claims Apple’s iOS and Mac devices infringe on four patents originally issued to Motorola that Google acquired over the last year, independently from its acquisition of Motorola Mobility announced in August.

Apple vs. HTC

“HTC will continue to protect its patented inventions against infringement from Apple until such infringement stops. We believe that we have an obligation to protect our business, our industry partners and our customers, who love using our products,” HTC General Counsel Grace Lei told Bloomberg, which broke the news of the new suit.

The company’s choice of words may be considered ironic in that the patented inventions weren’t actually invented by HTC itself, but that doesn’t change the legal weight of the patents, which are now owned by HTC. Bloomberg reported that Google acquired one of the patents in October, two in February, and the fourth one in March.

One of the patents covers a method for upgrading software wirelessly. Another is for a method of transferring data between a microprocessor and a support chip. A third is for a method of storing user preferences, and the fourth is for a method to provide consistent contact between application software and a radio modem.

If the company’s claims hold up in the legal process, it will be a big shot in the arm for HTC, which has been pummeled by Apple at both the U.S. International Trade Commission (ITC) and U.S. courts. In ongoing battles in both venues, HTC’s Android devices have been found to infringe on at least two key Apple patents. HTC’s own patent portfolio hasn’t offered the company much protection against Apple.

ITC

Speaking of the ITC, HTC amended an existing complaint with that body with a claim that Apple is infringing on five additional patents bought from Google. Three of these patents were originally granted to Openwave and purchased by Google, while the other two were granted to Palm and also sold to Google.

Google transferred all nine of these patents to HTC on August 29th, with the transaction being recognized by the U.S. Patent & Trademark Office on September 1st.

The patents in the ITC case relate to an interface that lets the user add an identifier such as .com or .org; an interface that enlarges the characters that are being typed on a virtual keyboard; a method of displaying information on mobile devices; and status bars that let a user check phone calls, text messages or calendar events.

Patents

One very interesting aspect of all this is that by selling these patents to HTC for that company to use as a counter to Apple’s own patent onslaught, Google itself can no longer use them to protect other Android OEMs or itself, come the day that Apple decides to finally sue Google directly.

Does this mean that Google is so sure of its growing patent portfolio—the company will get 17,000 patents, with another 7,000 pending, if it can complete its acquisition of Motorola Mobility—or does the Mountain View, CA company view these patents as good enough for HTC, but not necessary for the larger fights?

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Comments

Bosco (Brad Hutchings)

It’s really simple, Bryan. RonMacGuy, please take note. Google will effectively lease its patent portfolio to licensees who are or have been bullied by Apple so that the licensees can retaliate. Google will not sue Apple, even for all the obvious copying of Android features in iOS 5.

Google is pragmatic about IP. It knows that everyone, itself included, infringes because infringement is unavoidable. That’s why you won’t see Google initiating lawsuits. Apple infringes too, because it’s unavoidable, but seems to think there is first mover advantage in bringing legal action. There probably is a marketing and brand advantage, and of course, the fan boys just eat it up. But it will lead to absolutely nothing, just expensive tit for tat back and forth that benefits nobody but the scum lawyers who engage in it.

And Google will never turn Android into a lame, proprietary vertical integrated whole widget play. Android succeeds because choice is both built-in and tolerated, even encouraged.

Bryan Chaffin

[Your spell checker was acting up again, Brad. I caught it for you. Please get that fixed.]

I’d be willing to make a wager with you, Brad. To start our negotiations, I’ll posit that the very least thing that happens from these patent wars is that Android OEMs will end up paying Apple a royalty for every device sold.

The next escalation in results will be that Google will also have end up paying Apple a royalty on every device sold.

At the very least, any royalties paid to Apple will exceed any reciprocal royalties paid by Apple.

The OEMs, or Google, will end up paying Oracle, too, but I am not versed well enough in that suit to include that in my proposed wager.

Nemo

Florian Mueller has some interesting comments about HTC’s nine new patents, which it is asserting against Apple’s products in various infringement actions.  The most interesting thing for me is that HTC’s federal court complaint, according to Mueller, is to too vague to survive a motion to dismiss.  However, the normal approach for a defendant, who is facing a claim that is so vague that it can’t be answered, is to file a motion for a more definite statement, and, if the amended count that contains the claim is still insufficiently pled, move the court to dismiss that count of the counterclaims. 

Federal judges will almost always allow a party to correct the deficiencies in its pleading, unless it appears that those defects cannot be corrected.  In that case, the court on motion or sua sponte will dismiss the defective claim or defense.  So, as Mr. Mueller said, supra, and if his description of HTC’s new court claims is correct, HTC’s new amended complaint, containing its new infringement claims, appears to be hasty, and HTC will need to amend it.

Only if HTC can’t correct the procedural defects of the vagueness of its new claims by stating exactly which of Apple’s devices allegedly infringe on which claims in which patents, along with a claims chart showing how a particular claim reads on a particular allegedly infringing Apple device, will the vagueness of HTC’s new claims prove fatal.  Assuming that HTC can properly state its new claims, the more interesting questions are whether the patents are valid and enforceable and, if they are, whether any of Apple’s devices infringe any of them.  We will have to wait for the answers to those questions.

Also, the judge won’t be pleased.  At this level of sophistication of counsel, federal judges expect claims and defense to be properly and sufficiently pled.

And Bryan don’t assume that Google’s transfer of the nine patents to HTC conveyed all of Google’s rights to HTC.  The notion of an outright sale surprises me, as I would expect Google to retain the right to practice the patents, to license the patents to others, to make certain that HTC could not use the nine patents to sue other Android OEMs, and have the right to grant other Android OEMs sufficient interest in the patents to be able to sue Apple and others for infringement.  There are a number of ways to structure a transfer to accomplish those goals.  For example, a license, depending on its terms, can give a licensee standing to sue an infringer, so I suspect that what is being called a sale is really some sort of license or conditional assignment.

Bosco (Brad Hutchings)

Bryan, pick a date by when you think some royalty will be paid to Apple. It won’t, neither by Google nor any of the Android licensees. This will be just like Nokia for Apple. Apple’s biggest problem is that it doesn’t license its patents, so there is no established value for them. That was a problem Nokia did not have with its 3G patents that Apple infringed.

But as part of our bet, we need something to cover this Florian Mueller chap. Dude is a clown of the highest order, and the Mac community is just under his spell right now. It’s a combination of him saying what people want to hear and sheer laziness about maintaining a healthy skepticism. Look at Nemo parroting Mueller’s GPL claims about Android, ignoring the difference between derivative and collective works, ignoring actual case law (Lee vs. A.R.T. Company) about collective works. It’s like zombies have taken over the community I used to love.

P.S. That Ron guy can now write down that Nemo agrees with my assessment from August 15 that Google would just lease its patents as needed to Android licensees to use in retaliation against Apple (or Microsoft or whoever) as needed. Funny how easy that one was to call.

Nemo

Bryan, trying to pick a date certain in the context of litigation is a fool’s wager.  Don’t do it.  Also, Apple is more interested in injunctions that it is in royalties, so Apple could prevail in a lawsuit, yet there will be no royalties.

And Bosco, the courts, based on expert submissions, asses the commercial value of unlicensed patents all of the time, and there are number of ways to do that.  But, in a circumstance where a Plaintiff, such as Apple, does not license and doesn’t want to, an injunction is the most likely remedy for infringement.

Jamie

Nice take, Bryan. Been reading about this here and there today; imagine all of the trouble Google could have saved everyone, most of all themselves, if they’d just done the right thing and sought proper licensing deals to begin with - clearly the market has proven that the Android project would have been just fine, they would have still made plenty of profit, as would their partners have. With all of this in the open, it’s a miracle anyone wants to continue doing business with them at all. Sigh.

Nemo

And Bosco, whichever one of Google’s lawyers gave you LEE v. A.R.T. COMPANY, 125 F.3d 580 (7th Cir. 1997), tell him that he will have to do better than that, because that case is easily distinguishable on the facts.  Just one example of such a distinction is that Judge Easterbrook, who is an excellent judge, found that there was no derivative work, because there was no transformation of the preexisting work such that the derivative work would be copyrightable.  That is not true for Google’s use of Linux in Android.  Android is based on Linux and is a resulting expression, the Android OS, that Google could copyright but for the requirements of GPL v2, which requires that all works derived from Linux be licensed under GPL v2 and, as we have discussed, that also requires the complete source code of the derivative program be provided upon request. 

I’d make short work LEE v. A.R.T. COMPANY if that were used against me in a vain effort to establish that Android is not a derivative work of Linux, and I would have no qualms about arguing that to a panel containing Judge Easterbrook.

Bosco (Brad Hutchings)

Nemo, explain to the audience what “Bionic” is. Thanks.

Nemo

Dear Jamie:  Well, said.  Google’s senior managers present such a guise of treachery and mendacity, that they and Devil will have to sup with very long-handled spoons, and it is hard to say whose spoon would be longest.

Nemo

Bsoco:  I don’t use Moto’s stuff, especially stuff that hasn’t been released yet.  However, perhaps one of your contacts inside of Google has given you some information about Bionic that you can share with us.  I will say this though:  I think that it’s so cute that Moto is continuing with the Borg theme.  If they get Jeri Ryan to hawk it, I’d be tempted to buy one, but Jeri would have to do a bit more to close the deal.

Goodnight.

Bosco (Brad Hutchings)

Nemo: In your quest to turn Mueller’s drug-induced (there is no other explanations) musings about Android being a derivative work of Linux, you will need to know precisely what “bionic” is, because that is the heart of his “claim” (if you want to call it that). Once you figure out what “bionic” is, you need to figure out why it is different from “glibc” that ships on any Linux distro and even Mac OS X. Specifically, you need to figure out why glibc does not expose applications that link to it (and thus trough to the Linux kernel) to GPL adherence. Then you need to figure out what is different about “bionic”.

Or, an easier thing would be to just admit that you cribbed this dumb idea from Florian Mueller, a former Microsoft consultant whose job was to spread FUD about open source during the SCO kerfuffle. I’d forgive you because everyone is falling under his spell right now. We could all move past this.

Bryan Chaffin

Naming a date would, indeed, be a bad arbitrary deciding point for any wager. For both of us, I might add.

It would (ironically) be easier to use a nebulous and vague point in time such as “when all of ‘these’ cases have been decided, settled, or withdrawn.”  Of course, that may well make ever concluding a wager nigh on impossible, but I’d rather risk that than having an arbitrary date.

I’d also like to emphasize that my royalty payment benchmark was a starting point. I still think it’s possible (actually, I think it’s likely) that Apple is going to win an injunction that either halts shipments of some or all Android devices into the U.S. or forces major changes in the way those devices work.

I would call such an event a major win for me in terms of this wager. A minor win would, as mentioned above, an outcome where Apple receives more in royalties per Android device than it pays in royalties per iOS device.

A major win for Brad would be that iOS imports are halted in the U.S. A big win would be that nothing happens and everyone ends up settling in non-royalty, cross-licensing agreements. A minor win would be if
Apple pays more in royalties for its iOS devices than it receives for Android devices (per unit).

I’d suggest we find a 3 or 5 person panel of people to adjudicate the wager for us.

I’d seriously like to hammer something out here, Brad, and I invite anyone who has something constructive to help us establish the terms of the wager to chime in.

Nemo

Bionic is:  “In computing, the Bionic libc is a derivation of BSD standard C library code. Originally developed by Google for the Android embedded operating system. Bionic has several major Linux-specific features [emphasis added] and development continues independent of other codebases. The publicly-stated[1] goals for Bionic are:

  BSD license: Android uses a Linux kernel which is under the GNU General Public License (GPL), but Google wished to isolate Android applications from the effects of the GPL. GNU libc which is normally used with the Linux kernel is under the GNU LGPL, as is the alternative uClibc.
  Small size: Bionic is much smaller than glibc and somewhat smaller than uclibc.
  Speed: Bionic is designed for CPUs at relatively low clock frequencies.

Bionic is lacking many features found in full libc implementations.

The recommended way of directly using and extending Bionic is with the Android Native Development Kit.”

So Bosco, you hoped to show that Android isn’t a derivative of Linux by offering a library, Bionic, that itself is most likely a derivative work under the GPL license, because it contains several major Linux specific features.  See, supra.  So, if Bionic is a derivative work under the GPL, it would only reinforce Android’s status as a derivative work under the GPL, because it uses the Linux kernel and because it uses Bonic, which is also a derivative work.

But what if Bionic isn’t a derivative work under the GPL, but is BSD licensed code?  First, since the BSD license is fundamentally inconsistent with GPL v2, in that it permits proprietary code; using it with Android’s Linux kernel would instantly void Linux’s GPL v2 license that licenses Google use of Linux in Android so that Android would be infringing software, and Google would, thus, be an infringer.

So either Bionic is a derivative work under the GPL, which reinforces and provides an additional basis for Android being a derivative work, or Bionic is licensed under BSD, which means that it can’t be used with Linux or any other software licensed under the GPL license. 

The result for Google is that it is either infringing with Android because it hasn’t released the complete source code for Android, which is a derivative work, or Google is infringing with Android because it both hasn’t released the source code for Android, which is a derivative work because of its Linux kernel, and because it voided its GPL license to use Linux by combining Bionic’s BSD code with the GPL code of Anroid’s Linux kernel.  Google is an infringer either way, the only difference being whether the basis of Google infringement with Android is X or X+1, where X is the bases of Google’s infringement, before considering the Bionic.

Nice going Bosco.  I think that you’re fired from Google’s legal team.

Lee Dronick

the courts, based on expert submissions, asses the commercial value

Sometimes I think the spellchecker God lets the correct word get through. smile

Legalities are the continuation of war by other means.

skipaq

Well Bryan, you are spicing things up here. I had lost interest in all this legal discussion. Anybody giving odds? wink

Here’s a prediction: Apple isn’t going to be terrified into dropping their legal actions because HTC is now using Google patents purchased to fight back. Another: Apple will continue to bring legal action against those it perceives to be infringing.

Nemo, you don’t have to convince Brad that Google is infringing. He has freely stated that Google (as well as everyone else) infringes. Memo to Google lawyers: Don’t call Brad as a witness.

The debate should be on the question of legal and moral relevance. Kinda think that issue is important to any software and/or hardware company that has invested heavily in developing a product.

Bosco (Brad Hutchings)

So Bosco, you hoped to show that Android isn?t a derivative

Actually, I don’t have to show squat Nemo. You’re the one making allegations without any demonstrable knowledge of relevant engineering and licensing facts, and then I (or daemon) end up having to point out the relevant potential lines of attack to you. Somewhere here, I posted to the blog of an actual lawyer who has synthesized the relevant engineering, licensing, and legal facts to point out that Mueller is a (Microsoft-subsidized) clown.

Bryan, maybe we need a series of bets covering HTC, Sammie, the ITC, and federal court. HTC/ITC is coming up. Both Apple’s and HTC’s original complaints should be settled by year’s end.

@skipaq: Please quote me in context. They all infringe, including Apple. It’s unavoidable for products with software components this large. Note that your super moral Apple is paying a significant royalty to Nokia and agreed to drop its multi-touch claims against Nokia.

skipaq

Brad, my quote was in context. And you just said it again; plus I acknowledged that your contention was that they all infringe. I have never said nor do I believe that Apple is this super moral entity. I will say this, Apple is perfectly willingly to take their case to court and then go from there. I look at the resolution between Apple and Nokia to be a good thing.

Lest you put a twist on that statement; I am not saying it was what Apple wanted or just good for Apple. I am saying that it made clear the rights of each company and they could then make sound business decisions with this settlement made. Apple certainly isn’t crying about it and it hasn’t changed their product schedule as far as we know.

Now, that is a whole lot better than doing business with everyone infringing. I believe you are not realistic in thinking that these counter claims being made by HTC, Samsung or whoever are going to change Apple’s tactics. I also believe that it is imperative that the legal system uphold the rights of ownership for IP. If it belongs to Google then well and good. If it belongs to Apple then likewise.

Another prediction: Apple will win some and will lose some; but the final tally will be decidedly in Apple’s favor.

Bosco (Brad Hutchings)

skipaq: I missed the “(and everyone else)”. My bad. But to clarify another thing, I don’t think the counter-actions will have any effect on Apple in terms of curbing its self-righteous legal adventures. Apple needs to take a serious hit to its brand for this crap to stop.

Nemo

These IP-infirngement battles among Oracle, Apple, Microsoft, and Google and its Android OEM raise a couple of issues.  First, as Jamie discusses, supra, why didn’t Google simply do things the right way.  Google could have either properly licensed the IP that it needed, or it could have developed Android from scratch.  Google certainly had the money and engineering talent do either of those things, yet, depending on what the court decides, it appears not to have done either of those thing but instead may have decided to use others’ IP without license and thus risk being found liable for infringement.  Why?

I think that Mr. Jacobs, Oracle’s lead counsel, will give us the answer:  Google was so anxious to quickly get to market, before Apple’s iPhone could consolidate its lead, that its leaders made a poor business decision to risk infringement, rather than accept any delay in getting Android to market.  However, other companies, who have faced even more dire circumstances, took the time to do things right.  Apple nearly went out of business in the late 90’s, and up to 2003, Apple’s performance was mediocre, but it chose to develop its own OS, OS X, and properly license BSD Unix as the basis of OS X.  Louis Gerstner didn’t panic when IBM was on the brink and start infringing on others’ IP.  Yet, Google, which was doing great in its financial performance, couldn’t spend the money, which it had, and time, about two to three years, to bring Android to market in the right way?

If this goes badly for Google and/or its Android OEMs in the courts and other tribunals, I think that it will come down to disastrous business decisions by Google’s senior managers to cut corners too closely, which resulted in Google and/or its Android OEMs infringing on others’ IP rights.

The second issue is one that the open-source community must address:  Whether to vigorously prosecute persons, especially companies that seem to carry the banner of open-source, who use open-source software without honoring the applicable open-source licenses.  While Bosco’s allegation, that everyone infringes so IP, therefore, should be ignored, is false, Google is not alone in playing fast and lose with open-source licenses.  HP’s WebOS is based on Linux, as it too has a Linux kernel.  HP’s predecessor in the WebOS, Palm, never denied that fact, but I don’t think either Palm then or HP now timely release, if release at all, the source code for the WebOS, and there have been several other cases, where a defendant tried to enjoy the benefits of GPLed open-source software without honoring the obligations of the GPL.  Yet, there has been no outcry and appropriate action from those charged with protecting the GPL licensing of Linux, which is the foundation of open-source principles and licensing. 

Have the leaders, who are charged with protecting the GPL and Linux, accepted a tacit Faustian bargain, where breach of the GPL will be tolerated if the quasi proprietary use of Linux is successful enough to make the use of Linux at least commonplace, if not pervasive?

Bosco (Brad Hutchings)

Have the leaders, who are charged with protecting the GPL and Linux, accepted a tacit Faustian bargain, where breach of the GPL will be tolerated if the quasi proprietary use of Linux is successful enough to make the use of Linux at least commonplace, if not pervasive?

Parroting a widely debunked Microsoft paid lobbyist. Have you no shame, Nemo? As of last night, you didn’t even recognize the name of the software layer which is the centerpiece of this alleged (but still totally bogus) GPL violation. And yet, you carry on. Pathetic.

Nemo

Bosco:  You’ve got me.  I am only a poor parrot, unlike you who are obviously the mastermind and source of Google’s decision to create and use Android allegedly in violation of others’ IP rights and of Google’s legal and business strategy for dealing with the legion of infringement suits spawned by that decision. 

It is an honor beyond description to speak with Larry Page’s brain.

Bryan Chaffin

Bionic is also the name of an unreleased Android device that’s currently being advertised for release on September 18th, if memory serves. I think it’s a Moto device, but I don’t have time to double check that at the moment.

Bryan Chaffin

Also, back to my proposal for a wager! I think breaking it down by individual company adds an unnecessary level of complexity to the wager. I think we should keep it at three parties: Apple, Google, Android OEMs.

We could also include another element to the terms: Android OEMs leaving the platform due to problems relating to patents (as opposed to, say, leaving the platform because Google buys a clue and goes whole widget).

skipaq

That last element (dumping Android) would be a true test of what is going on behind the curtains of corporate offices these days. The realities of business outweigh legal strategies. Samsung cannot be very happy these days. HTC’s latest may be Custer’s last stand.

RonMacGuy

It is an honor beyond description to speak with Larry Page?s brain

Nemo, for all we know, Bosco may be Larry Page!! That sure would explain things!!

Bosco (Brad Hutchings)

Bryan: Real lawyers have weighed in on Mueller’s stupid (and probably influenced by Microsoft funding) theory months ago. This particular lawyer went to the trouble of understanding the architecture, the licenses, comments in Linux code relating to the license, and copyright law in order to offer informed rebuttals of Mueller’s silly idea. Nemo seems to have read a screed from Mueller which could be shortened to about 3 sentences and decided it has so much merit, he should preach it to the masses.

Most people buying smart phones these days don’t want an iPhone. Its $200 on contract, sometimes as low as $150. Affordability isn’t an issue. A majority end up buying Android, despite all the “shortcomings” Apple fans have spouted incessantly for almost two years. That’s the problem Apple faces.

Bryan, I guess just come up with a list of things that Mueller has convinced the Apple faithful must happen because Google are copiers, infringers, and buggerers. I’m sure the list will be a no-brainer for both of us to accept.

RonMacGuy

Most people buying smart phones these days don?t want an iPhone.

Oh, poor Bosco, wrong again. You really should watch your choice of words, my friend. You see, most people buying smart phones these days do want an iPhone. Take a look.

AT&T - iPhone 4 is the top handset the last three months in a row. iPhone 3GS is second (huh, imagine that).

Verizon - iPhone 4 is the top handset the last three months in a row.

“T. Michael Walkley, an analyst with Canaccord Genuity, found the iPhone 4 leading the pack in smartphone sales despite being more than a year old and about to be eclipsed by a new model within months. It was the leading smartphone seller in June, July and August on AT&T and Verizon. On AT&T, the iPhone 3GS also performed exceedingly well, as the number two seller those months.”

“Walkley also found the iPad 2 (unsurprisingly) was the top-selling tablet on Verizon and AT&T. The first generation iPad also continues to sell well, beating out many newer Android tablets that are available.”

Now, I think you meant to say that most people these days don’t want iOS on a smartphone. I had to say smartphone, because I suspect more people want iOS on a device (iPhone + iPad) than android on a device (smartphones + tablets). So, from now on, choose your words more carefully.

And, for you to say, “That?s the problem Apple faces.” demonstrates you are totally clueless yet again. In what way is this a problem for the most valuable technology company in the world? Hmm?

And, to quote your own words yet again, “And yet, you carry on. Pathetic.”

RonMacGuy

Oh yeh, buddy Bosco, one more quote from that page:

“It?s also likely that the next generation iPhone will be available on Sprint and possibly T-Mobile.”

Would you like to place a little wager that if/when iPhone 5 becomes available on Sprint and T-Mobile, that it will, within 3 months if not immediately, take the Number 1 spot from all android alternatives? Hmm? Come on, “Most people buying smart phones these days don?t want an iPhone,” right? Put your pride where your mouth is, if you are able.

Darn it, I said I was going to start being nicer, didn’t I? Oh well, he hates me already…

Lee Dronick

You see, most people buying smart phones these days do want an iPhone.

I agree with that. I also have a number of family and friends who got disgusted with the clunkiness of their Android based phones and upgraded to an iPhone. Don’t skate to where the puck is, skate to the corner of Technology and Liberal Arts.

Bryan Chaffin

Ron, please note that there is a difference between being the #1 device and a platform having more market share. More people buy Android devices than iPhones, but iPhone is the #1 device. The two are not mutually exclusive.

Indeed, this is precisely why I quibble with Brad when he insists that Apple must lose in order for Google to win. Both companies are winning the thing they care about in the smartphone market at this stage in the game (Apple wants profits, Google wants share, they each have what they want).

In this case, Brad is (sort of) right when he says “a majority of people don’t want iPhones.”

The sort ofs:

1.) Android doesn’t have majority share in cell phones, or even smartphones. More market share does not (yet) equal majority market share. I personally assume Android will eventually have majority share in both categories, but it hasn’t happened yet.


2.) What people buy does not necessarily equate to what they want. I suspect that a majority of people do want iPhones and that many of those buying Android are settling.

I can not back up point #2 with any data, and I could well be wrong.

To that point, Brad, you can not rule out cost as a barrier to iPhone entry. Most Android devices are markedly cheaper than iPhones?that is part of the “open licensing” point.

Bosco (Brad Hutchings)

1.) Android doesn?t have majority share in cell phones, or even smartphones. More market share does not (yet) equal majority market share.

Android handsets, in total, account for more than 50% of new purchases in the US. From this and the facts that iPhone is available to more than 80% of the US phone market for at most $200, I extrapolate that “most people don’t want an iPhone”.

Bosco (Brad Hutchings)

2.) What people buy does not necessarily equate to what they want. I suspect that a majority of people do want iPhones and that many of those buying Android are settling.

Actually, there is a fair segment of social scientists who would implore you to observer what people do instead of asking them what they want or think in order to better divine their beliefs and intentions. But I digress…

Bryan Chaffin

Can you source that, Brad? I don’t doubt you, but the most recent data I can place shows Android at under 50% market share.

And that’s just for smartphones?smartphone purchases are still a subset of overall cell phones purchases, meaning that “most people” does not apply to any individual smartphone platform.

That’s an important distinction.

Also, your extrapolations are just that, as are mine. You are making a categorical factual assertion based on opinion, something I am personally a tad more careful about. smile

[Many edits made to this post! - Bryan]

Bosco (Brad Hutchings)

To that point, Brad, you can not rule out cost as a barrier to iPhone entry. Most Android devices are markedly cheaper than iPhones?that is part of the ?open licensing? point.

Really Bryan? AT&T iPhone 3GS for $49 for like the last year. iPhone 5 for $200.

So, you’d like how I conclude that new Android sets are > 50% of smart phone sales in the US. I have been told by someone who gets paid to be on top of this stuff that the comScore numbers covering March to June 2011 will yield this result with a little massaging. In fact, it’s well past 50%.

Bosco (Brad Hutchings)

So, from that report. we have 78.5 million smart phone users in June, up 8% since March. This gives us 72.7 million March, an increase of 5.81 million.

Android had 34.7% installed base in March, or 25.22 million phones.
Android had 40.1% installed base in June, or 31.47 million phones, an increase of 6.25 million phones, actually more than the installed base grew.

Apple had 25.5% installed base in March, 18.54 million phones.
Apple had 26.6% installed base in June, 20.88 million phones, an increase of 2.34 million.

Now, this is where you have to apply some reasoning. Call Apple stable at 25%. This is not an affront to the fanboys, just a conservative use of the Apple numbers. Apple, in maintaining 25% share, sold 2.34 million phones. So you can conclude that 100% share is about 9.2 million phones.

That is, 9.2 million new smart phones were sold. The market size gain of 5.81 million reflects some previous smart phone owners getting new smart phones. Android’s share of the 9.2 million sales would then be 68%.

Now look, this is not a result any of you want, so please, if you’re going to dispute it, please take the time to thoughtfully work through the math and the reasoning.

Nemo

Well, Bosco, Mr. Hogle?s argument is interesting, but it is beside the point.  Mr. Hogle argues that developers? apps are not subject to the GPL, because bionic isn?t a derivative work of Linux.  While that is an important issue, it isn?t the one that I raised.  To wit:  Android is a derivative work of Linux, because it is basis of Android that makes Android work.  Whether Bionic is a derivative work or not does not determine whether Android is a derivative work of Linux. 

The one relevant issue that Mr. Hogle raises is his claim that:  ?This is non-controversial because the Linux kernel is licensed under terms that permit linking to kernel functionality.  Mr. Hogle goes on to support his claim with this:

“The Linux kernel source code can be accessed here: http://www.kernel.org/pub/linux/kernel/.  Clicking on the “COPYING” link reveals the licensing terms applicable to the kernel - namely, the GPL v2. However, immediately before the recitation of the GPL is the following statement:?

“NOTE! This copyright does *not* cover user programs that use kernel?services by normal system calls - this is merely considered normal use?of the kernel, and does *not* fall under the heading of “derived work”.?Also note that the GPL below is copyrighted by the Free Software?Foundation, but the instance of code that it refers to (the linux kernel) is copyrighted by me and others who actually wrote it.

“This statement means that userspace programs that invoke functionality of the kernel will not be considered derivative works of the kernel and will not be required to be licensed under GPL. ?Google posits that this statement is the equivalent of licensing the kernel under the so-called “GPL + exception” - essentially, a copyleft license that permits invocation of system calls by non-GPL programs such that non-GPL programs are not considered derivative works and therefore not subject to the obligations of the GPL.”?

Mr. Hogle?s argument, supra, and his citations to the links, supra, seem to support the claims that Android can link to Linux?s kernel and not be a derivative work.  But, unfortunately, the only link that wasn?t dead was the link for GPL + exception.  However, because of the dead links, I couldn?t confirm that any such exception for linking to the Linux kernel exist in GPL v2.  Quite to the contrary, the copy of GPL v2 that I got off the Open Source Initiatives? website, http://www.opensource.org/licenses/GPL-2.0, states something quite different.  It provides in the last paragraph of Section 3:

“The source code for a work means the preferred form of the work for making modifications to it. For an executable work, complete source code means all the source code for all modules it contains, plus any associated interface definition files, plus the scripts used to control compilation and installation of the executable. However, as a special exception, the source code distributed need not include anything that is normally distributed (in either source or binary form) with the major components (compiler, kernel, and so on) of the operating system on which the executable runs, unless that component itself accompanies the executable [emphasis added].” 

But the exception, supra, expressly does not apply to Android, because all of Android beyond the scope its Linux kernel does accompany that Linux kernel or a modified derivative version of that kernel.  And without that exception, Android is a derivative work that is licensed under GPL v2 and that must comply with the provisions of GPL v2. 

So the only exception for linking to the Linux kernel is for executables that don?t accompany the Linux kernel, such as applications.  But the layers in the schematic of Android that Bosco provided (http://developer.android.com/guide/basics/what-is-android.html) certainly, if nothing else, accompany Android?s Linux kernel, and those layers certainly link to Android’s Linux kernel.  Therefore, the exception in GPL v2 does not apply and, thus, Android is a derivative work.

From one who fancies himself a real lawyer.

Nemo

Now, I must leave you, my worthy interlocutors, because it is time to get ready for the first regular season game of the NFL.

RonMacGuy

Ron, please note that there is a difference between being the #1 device and a platform having more market share.

I understand completely, Bryan. My criticism was the use of the term “iPhone” vs. android as compared to “iOS” vs. android. Bosco said “Most people buying smart phones these days don?t want an iPhone” which implies device and not platform.

It is a true statement that “Most people on AT&T want an iPhone over any other smartphone.”  It is a true statement that “Most people on Verizon want an iPhone over any other smartphone.” I am willing to bet money that if/when iPhone is available on Sprint and/or T-Mobile, this will be a true statement: “Most people on Sprint and T-Mobile want an iPhone over any other smartphone.”

RonMacGuy

It still cracks me up that Bosco takes victory for his precious android by comparing a single manufacturer (Apple) with a 2.5-year-old design iPhone 3GS and a 1.5-year-old design iPhone 4 on just 50% of the US carriers against a dozen manufacturers with dozens of phones of all shapes and sizes across all 4 US carriers. 1 in 4 smartphones are iPhones.

android was supposed to beat iPhone market share down to 10% by now. It hasn’t.

Bosco (Brad Hutchings)

Ron, your statements are non-sequitur and/or you spelled “more” wrong. To clarify what I’m talking about above because it seems that you just want to be difficult… iOS phones collectively versus Android phones collectively. It does not concern me that no single Android phone sells as many units as the iPhone 5. I consider the lack of diversity and choice on the iOS side a shortcoming, just as you consider choice on the Android side a shortcoming.

So anyway, you’re good with numbers, managing a $50M engineering budget. Care to explain how my calculation above that in the US, about 68% of smart phone sales between March and June, 2011 were Android phones is incorrect? That means more than 2.5x as many Android phones than iPhones sold in the US during the time period. That oughta sting, a lot.

skipaq

The real problem with Brad’s calculations are they are too limited to have any real sting. If you want to cherry pick in Apple’s favor try the month/quarter of a new release. It is simply a misleading statistic to use in measuring what most new smartphone purchasers prefer.

Also, this doesn’t take into account strategic business decisions. Can Apple thrive with 25-30% share of the total market in smartphones with their margins? Well, yes. Now look at the same question from the same business perspective of a single Android OEM. Can they thrive with their margins with a smaller market share. Remember, they aren’t looking at Android’s overall market share; just their share.

Now, throw in all the legal hassles with an OS that they have no control over and you begin to get the picture. People who make these huge business decisions don’t like that kind of scenario. Why did Google buy Moto? Why sell IP rights to HTC? If you have your Google glasses on; you spin this as more power to kick the bully, Apple.

If Apple is really in such bad shape, why is Google doing these things? How can Apple be the big bad bully and be losing? All the noise coming out of Samsung is not good for Android. This deal with HTC can be seen from a completely different light than what is publicly stated.

No, there is no sting. Apple is doing well and remains focussed. They are acting as if they have a solid plan. All the little Android bots are running around reacting to what Apple does and bumping into one another. Meanwhile, Apple is readying their next move

Bosco (Brad Hutchings)

Of course, the whole premise that Android handset makers will abandon Android is silliness. Abandon it for what? Apple doesn’t license iOS. So the handset makers can compete over almost 70% of current sales in the smart phone space (US), or they can compete over much less than 5% (WP7) against favored licensee Nokia.

And skipaq, I did cherry pick in a 3 month period following the release of the Verizon Unicorn.

RonMacGuy

Bosco, I’m not going to get sucked into your immature garbage again. $60M budget, by the way, but I suspect you know that.

Stand on your silly programming principles with your open android and market share. What I care most about is my stock portfolio. I’m a businessman, and Apple’s model just makes more sense. Apple profit

“With just two smartphone models available for sale, Apple took in two thirds of profits from smartphone sales in the second quarter among the top eight vendors in the world.  The news comes following Strategy Analytics? confirmation that Apple is also the world?s top smartphone vendor by volume. Four of the eight major smartphone vendors were profitable in the June quarter ? Samsung, Apple, RIM and HTC ? while Nokia, Motorola, LG and Sony Ericsson all reported losses. Total profit from sales of smartphones among these eight companies declined overall in the second quarter, but Apple?s profit share jumped from 50% in the second half last year and 57% in the first quarter of 2011 to 66.3% this past quarter.”

So, continue your cherry picking and hiding from what really matters. I don’t really care. I’ll think of you in my retirement.

Bryan Chaffin

Jeff covered this for us, hence me not remembering it: NPD pegged Android unit sales at 52% during Q2 of this year.  While that’s far less than 68% (really, Brad, that was a silly extrapolation), it is a clear majority.

Of smartphones.

So the phrase “Most people want Android devices” is backed up by sales, as long as you sub out “smartphone buyers” for “people.” I think it would be most accurate to say, “Most smartphone buyers are getting Android devices.” That is inarguable.

Mind you, I still believe that many folks are settling for Android for a variety of reasons. I still can’t prove it. Indeed, any opinions on what “most people want” are just that, opinions.

In the meanwhile, Google is still doing great with its market share and Apple is doing great with its hardware profits (66% of all industry profits in Q2). They both win, just like I’ve been saying for more than a year.

And Apple still owns and defines the tablet market, and the company sells a crap ton of iPod touches, meaning that iOS devices and Android devices as a whole are currently as close to being on par with each other as is possible.

And that still doesn’t matter, either.

skipaq

Of course, the whole premise that Android handset makers will abandon Android is silliness. Abandon it for what? Apple doesn?t license iOS. So the handset makers can compete over almost 70% of current sales in the smart phone space (US), or they can compete over much less than 5% (WP7) against favored licensee Nokia.

And skipaq, I did cherry pick in a 3 month period following the release of the Verizon Unicorn.

The Verizon Unicorn is a creature of your creation. No competent analysis of a market can result from your rubber band calculations of one period. Handset makers aren’t just looking at competing for 70% of smartphone sales. They are competing for 33% of smartphone profits. That kinda looks a little different.

Let’s see! Motorola Mobile? Selling out to Google. Wow! What are thinking giving up their huge chunk of that 70% market? Samsung? Up to their eyeballs in lawyers and jumping all over looking for options. Don’t they realize how good it is with their huge chunk of that 70% market. HTC? Wonder why they felt the need for some ammunition in their legal battle? But surely they aren’t concerned because they also have a huge chunk of that 70% market. Besides:

“Abandon it for what?” Brilliant observation of the squeeze these companies are under. You don’t have to tell them that. Their options are limited. None of them appear to be very happy about that.

Why don’t you enlighten us on Nokia’s decision to go with WP7? Do you really think there have been no conversations between Samsung and Microsoft? Is it at all possible that Google gave HTC some IP rights (instead of licensing them) because HTC was screaming about this Google mess?

The smartphone landscape is changing, We are arguing about the past.

RonMacGuy

Bryan,

Here is my view of the smartphone market (for what it?s worth). A percentage of the market buys an iPhone (15%?) because they are Apple fans who love the interface and the elegance of iOS and the integration with their Mac, iTunes, app store, etc. A percentage buys an android phone (15%?) because they hate Apple or they stand on the ?open? principle or they are tinkering geeks who write free ad-supported programs that let you share your computer screen with others like a dozen other applications out there do (hey, he cracks fun at my engineering budget!!).

But the rest (70%?) hear how great smartphones are and go out and buy what they buy for a dozen other reasons, none of which are because they love or hate Apple/android or anything about ?open? or an enjoyment of tinkering. Maybe they are loyal to their carrier (prefer Sprint or T-Mobile over AT&T or Verizon). Maybe they want a huge screen because they can?t see very well. Maybe (like my brother and a friend at work) a Verizon software update bricked their android phone and they now have to use some other person?s rejected/refurbished phone until their contract runs out and they can then buy an iPhone (true). Maybe battery life is important to them. Maybe color is important. Maybe the looks of the phone are important. Maybe the accessories are important. Price.  They need 2 phones and there is a ?buy one get one free? offer.  Perceived quality. Loyalty to a specific manufacturer (always buys Motorola or HTC or Samsung, and whatever comes on it is fine with them). Fear of malware. Speed. Need for a memory card slot. And on and on and on.

For this group, there are dozens of phones available for them to choose from, made by a batch of different manufacturers. Are there more choices that use android instead of iOS, Symbian, etc.? Sure. It?s free and it gets the job done, enabling some manufacturers to focus on building phones without having to worry about what will run them. Does this mean that people desire android over other operating systems? No, it doesn?t. It means that 70% of smartphone buyers choose the phone that they want and simply take what they get as far as OS. The fact that most are android is just an outcome and not a motivating factor.

RonMacGuy

That means more than 2.5x as many Android phones than iPhones sold in the US during the time period. That oughta sting, a lot.

1 in 4 US smartphone buyers are choosing a 1.5-2.5-year-old-designed “closed” iPhone, even though it is only available on half of the carriers, when you predicted that by now it would be 1 in 10, and iPads are still leaving all android tablets in the dust. That oughta sting, a lot.

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