The Chilling Effect of Apple’s HTC Lawsuit

Apple’s recent lawsuit against handset maker HTC may have had a chilling effect on the development of so-called “iPhone killers,” according to The Wall Street Journal’s Matt Phillips, who referenced a research report from Oppenheimer analyst Yair Reiner as saying: “Our checks suggest that the combination of warnings and legal actions are having their intended effects and are causing a number of competing handset programs to be shaken off-course.”

Mr. Reiner added: “Until recently, most high-end smartphone programs were focused primarily on trying to match the iPhone’s user experience, and secondarily on avoiding any egregious violations of Apple’s patents. We believe this order of priorities has temporarily changed–along with the industry’s appreciation for how far Apple is willing to extend the fight. Few OEMs believe that simply staying clear of multi-touch can, on its own, avert Apple’s wrath. We believe a lot of software and hardware is being sent back to engineering departments for work-arounds.”

Mr. Reiner also said that an ironic side effect of this recent development is a boost for Windows 7 Mobile: “The potential de-emphasizing of Android is also likely to benefit Win7 Mobile, which appears to be gaining significant traction. Part of Win7’s appeal is its capability as an OS. No less important, however, is its strategic value as a hedge against the risk of Android’s becoming too strong–or proving too weak.”