MacOS KenDensed: Patent Wars & Microsoft, Buyer of iPads

| MacOS KenDensed

Mac OS Ken's Ken Ray. The one and only.What do you get when you have patents of money and piles of money? Apple versus the world in patent fights, Microsoft paying for iPads in schools, and lots of iPhones. That, and Mac OS Ken’s Ken Ray with plenty of opinions.

Apple & HTC: Making it Real
The patent infringement case between Apple and HTC is like the Whole Foods parking lot: it’s gettin’ real. AppleInsider has patent-tracker Florian Mueller poking at the issue.

Among the many patents over which Apple has sued the Taiwanese phonemaker is one referred to as the ‘263 patent, which covers “realtime API’s.” Initially a judge for the US International Trade Commission said HTC did violate that patent, though his decision was overturned by the full six-judge panel.

Set back for Apple. Until now. According to the piece, U.S. Circuit Judge Richard Posner has issued an interpretation saying not only is HTC in violation of the Apple patent, the Apple patent looks pretty solid.

Now I’d imagine some of you have zoned out because it sounds like just another of the countless fights between Apple and other phone makers. But I need you to snap out of it. At least on this one. Because it looks like this could conceivably affect the whole Android ecosystem.

You know how we’ve heard that Apple’s suits against HTC and Samsung are really attacks against Google without actually attacking Google? Here’s the thing: The “263 patent” is not a layer added by HTC. It’s at the core of the Android operating system. An operating system guided by Andy Rubin, who just happens to have worked in the department at Apple that pioneered the technology that led to the patent in question.

Quoting the piece, “Apple argued that Rubin ‘began his career at Apple in the early 1990s and worked as a low-level engineer specifically reporting to the inventors of the ‘263 [realtime API] patent at the exact time their invention was being conceived and developed.’”

Mueller thinks, with the new guidance by Judge Posner, a jury would be likely to acknowledge not only the validity of Apple’s patent, but also HTC’s infringement of it. And, with the dots connected by Apple illustrating Rubin’s early work at Appel to his status as head of Android today, the win might not be infringement but willful infringement — which could, of course, be worse for Google and the whole Android ecosystem.

It’s gettin’ real.

Microsoft, Buyer of iPads
From the “adding insult to injury” department, AppleInsider says the state of Wisconsin plans to buy 1,400 iPads this year for use in the states school system. And they’re using Microsoft money to get them.

According to the piece, “Wisconsin’s iPads are being paid for with $3.4 million of the nearly $80 million settlement Microsoft agreed to pay the state to settle claims that it has systematically cheated consumers into paying too much for its software.”

Honesty is the best policy, Mr. Softy. Believe.

Apple Retail Boss: Job Filled
After months of active searching, Apple has finally found a replacement for former retail chief Ron Johnson. And he’s got some Apple fans a little nervous.

Fortune says the all-things-iMaker has tapped John Browett, CEO of UK electronics-seller Dixons, to be its new senior VP for retail. On the plus side, Browett helped move Dixons into the digital age, ditching analog TVs in 2008, and making good product deals, including an exclusivity deal for the iPad in 2010.

A separate piece on the appointment from The Telegraph out of the UK says, “Browett transformed the company’s fortunes in the face of growing competition from online retailers and supermarkets by emphasising Dixons’ customer service credentials.”

In the press release announcing the appointment, Apple CEO Tim Cook said, “Our retail stores are all about customer service, and John shares that commitment like no one else we’ve met. We are thrilled to have him join our team and bring his incredible retail experience to Apple.”

I’ve gotta say after reading these stories Browett may not be the worst choice Apple could have made, despite the stink associated with Dixons. And there does seem to be one.

A number of Ars Technica readers sounded off on the site about how craptacular Dixons is, or was, as a chain and how it makes them worry for Apple Retail.

Some of their fun quotes:

“The epitome of appalling service.”

“I’ve bought a few items from Dixons, and it’s never been a good retail experience … Once you have checked the stock with them, they then try to sell you all of the other rubbish like extended warranties, cases, and even cloud storage. After you have refused this they then just pass you to the till and move on to the next customer.”

Hey here’s a fun one:

If you want a dingy shop full of distracting always-on demonstration units, staffed by surly ignoramuses who only want to sell you an extended warranty, then Dixons was the place to go.

I put the question out to followers on Twitter and got similar responses, especially on the warranty up-sell:

“Dixons?” asked @jonregler, “God help Apple retail and customer service!”

Ogilvoie75: “Terrible store. Dirty old products. Staff know nothing and proud of it. Staff only interested in selling insurance/warranties. Bad”

And SomeHitchHiker: “Dixons have the worst staff, trained in how to sell warranties. Driven by commission, steering you towards their preferred choice.”

All of this sounds bad, but I am reminded of a similar store story in the states. I HATED, all-caps, HATED Circuit City for years. And years. All they did was up-sell, and push service plans. They bit.

Then one day I had to go in there for something, and no up-sell. I looked into it and, it turned out, they’d dropped the emphasis on commissioned sales for associates. Decided to pay them well instead. And it was actually a great place to shop. But it never lost the Circuit City stink from the bad old days, which may have been part of what finally drove it under. I don’t know.

Point is, all of the analysis of Browett’s time at Dixons have him turning customer service and other parts of the chain’s operations around. And it’s not Browett that has an associated stink, but Dixons.

So maybe it won’t suck. We’ll see.

Apple: King of Smartphones
IDC is out with a stat for Apple this week that — historically — just seems crazy. CNET has the industry tracker saying that Apple is now the third-largest cellphone maker in the world. Not smartphone maker. Cellphone maker.

That’s crazy.

IDC says two factors weighed in Apple’s favor: the introduction of the iPhone 4S in the fourth quarter, and weakness across the rest of the cellphone industry over the same period.

Kevin Restivo, senior research analyst with IDC’s Worldwide Mobile Phone Tracker, says “The mobile phone market exhibited unusually low growth last quarter, which shows it is not immune to weaker macroeconomic conditions worldwide.”

According to the firm, the 37 million iPhones Apple sold in the fourth-quarter were enough to give it a market share of 8.7 percent, well ahead of fourth-place LG’s 4.1 percent and ZTE’s 4 percent for fifth. But the gap going the other way is bigger. Second place Samsung commanded a 22.8 percent market share for the fourth quarter, behind still dominant Nokia’s 26.6 percent.

As the quarter ended, so ended the year. IDC says running from fifth to first, ZTE had a 4.3 percent market share for 2011. LG had 5.7 percent, Apple’s iPhone controlled a six percent share, Samsung had a market share of 21.3 percent, and Nokia ran the table for the year with a 27 percent market share.

Honorable mention, by the way, to everyone else in the industry. Their tiny shares combined actually best everyone else, with a 35.7 percent market share dedicated to a blanket “others” category.

As usual, what’s more impressive than Apple’s showing in the top five as far as units sold is the amount of money it made off of them. Once again, that amount is “most.”

AppleInsider has UBS issuing a research note yesterday saying that the company’s roughly nine percent of the cellphone market in the fourth-quarter earned it 36 percent of worldwide cellphone revenue.

Get ready for another crazy number: According to UBS analyst Maynard Um, iPhone sales in the holiday quarter helped boost handset revenue growth 29 percent versus the same quarter a year earlier. Take the iPhone out of the equation, and handset revenue grew four percent.

Third in cellphone sales in the world. Number one in terms of revenue. How can Apple only be the fourth largest phone maker in the states?

It starts by turning to a different set of numbers.

BusinessInsider has ComScore releasing its U.S. cellphone market share numbers for the holiday quarter. Here we find Samsung in first with a 25.3 percent share in the states, LG second with 20 percent, Motorola in third with 13.3 percent, Apple in fourth with 12,4 percent, and Research In Motion in fifth with 6.7 percent.

Apple was the only one on the list to grow its share from the end of the September quarter to the end of December. Samsung stayed even from one quarter to the next with the other three losing share.

As for smartphone operating system shares in the U.S., only first place Android with 47.3 percent and second place iOS with 29.6 percent managed to grow their footprints. Third place RIM, fourth place Microsoft, and fifth place Symbian all lost ground to the top two players.

Amazon: King of Vague Numbers
And finally this week, Amazon is still doing the numbers-without-numbers-thing on the Kindle line. Macworld has the book, eBook, and everything else seller saying that in the last nine weeks of 2011, Kindle sales — including those of the low-cost Kindle Fire tablet — were up 177 percent versus the same period in 2010.

Two things that make this edition of numbers without numbers particularly fun: First is the usual fact that we have no hard numbers. While “up 177 percent” sounds impressive, we don’t know how many they sold last year, so that tempers the excitement a tiny bit.

The one that I find more interesting, though: that nine-week span. The Kindle Fire was hotly anticipated, if you’ll pardon the pun, and it launched in the first or second week of November with pre-orders being taken in the weeks leading up. Amazon had no such wave-maker for the fall of 2010, so of course numbers were huge for the nine-week period.

I don’t say that to take away from the apparent success of the Fire. It just seems worth it to put that success in perspective.

A second indicator of the Fire’s success: the fact that Amazon’s profits were down 58 percent from the holiday quarter of 2010 to the holiday quarter of 2011. Officially, Macworld has the company saying that “flooding in Thailand and economic problems in Europe” were a drag on 4Q results, and there’s no doubt they were.

But a lot of people think Amazon is either just breaking even or maybe even losing money on each Kindle Fire sold — an investment they figure they’ll make-up through content sales going forward. That could help explain the drop in profits, despite the increase in device sales.

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