Apple's patent "warning shots" prove disruptive for handset makers

Discussion in 'Apple, Inc and Tech Industry' started by *LTD*, Mar 9, 2010.

  1. *LTD* macrumors G4


    Feb 5, 2009

    Apple's patent 'warning shots' prove disruptive for handset makers

    By Neil Hughes

    Before Apple publicly sued HTC, the iPhone maker has privately had "blunt conversations" with other smartphone companies that have proven disruptive to the roadmaps of would-be iPhone killers, according to a new report.

    In a note to investors Tuesday, analyst Yair Reiner with Oppenheimer research said industry checks indicate that, starting in January, Apple launched a level of discussions with top handset makers to "underscore its growing displeasure at seeing iPhone-related IP infringed."

    "The lawsuit filed against HTC thus appears to be Apple's way of putting a public, lawyered-up exclamation point on a series of blunt conversations that have been occurring behind closed doors," Reiner wrote.

    He added: "Rival software and hardware teams are going back to the drawing board to look for work-arounds. Lawyers are redoubling their efforts to gauge potential defensive and offensive responses. And strategy teams are working to chart OS strategies that are better hedged."

    Apple began actively protecting its patents, the note alleges, in January 2009, when a conference call took place in which the iPhone maker said it would not stand for having its intellectual property -- specifically, multi-touch functionally -- "ripped off." Apple reportedly threatened to use "whatever weapons we have at our disposal."

    The threats worked, as handset manufacturers declined to add multi-touch functionality to their phones that were released soon after. But as the year progressed, a number of companies began to release multi-touch capable devices, which caught the ire of Apple.

    The analyst said Apple's conversations have created "an effective oil slick" for competitors, as the Cupertino, Calif., company has clearly stated it intends to protect all of the aspects of the iPhone that make it unique, including touch gestures.

    Apple's moves have caused some phone manufacturers, Reiner said, to reconsider their wholehearted embrace of the Android mobile operating system platform created by Google.

    "The HTC suit, which is recognized as a proxy battle against Google, is causing OEMs to re-examine the strategy of relying overmuch on Android, lest it prove vulnerable in terms of core IP," he wrote. "This concern comes atop pre-existing misgivings about Google's end-game in wireless. (to commoditize the OEMs? To arrogate all value-added services?)"

    The conflict, Reiner said, has created an opportunity for Microsoft's newly unveiled Windows Phone 7 Series, due to launch this fall. Microsoft has also told potential customers it would support them legally if they, like HTC, were hit with a lawsuit over intellectual property.

    Reiner also cautioned that Apple's approach could backfire if taken too far, as entering into a legal battle with some of the biggest names in the cell phone business would be unwise.

    "Apple's legal maneuvering appears to have temporarily retarded its rivals' hot pursuit of the iPhone," Reiner said. "But it also brings Apple a step closer to a head-on legal confrontation with an array of gargantuan adversaries. Now that it has made its point, Apple may want to go back to saber rattling."

    Last week, Apple sued HTC over the alleged infringement of 20 patents related to the iPhone's user interface, underlying architecture and hardware. Apple cited some of HTC's most popular handsets, including the Google Nexus One, as infringing on patents it owns. The lawsuit made a clear distinction between Android phones and those powered by Windows Mobile.

    Apple is also engaged in a legal battle with smartphone giant Nokia, as Nokia first sued Apple last October, while the iPhone maker countersued in December. Nokia has accused Apple of violating patents related to GSM and wireless LAN technology, while Apple has alleged that its Finnish rival has infringed on 13 patents it owns.


    Not unexpected, but it shows that Apple is capable of as much subterfuge and cunning as any other industry player.
  2. kolax macrumors G3

    Mar 20, 2007
    Think cellphone makers are getting a shock with the dominance of Apple.

    Be interesting how Windows Phone 7 pans out in regard to Apple's IP.
  3. Rodimus Prime macrumors G4

    Rodimus Prime

    Oct 9, 2006
    I think WP7 is going to hurt apple pretty badly in the case that they will risk MS forcing them to back off.

    I read that and it sounds like Apple is scared. Apple is scared to deal with real competition. Now that the industry has adjusted to the iPhone and they are now adjusting the phones Apple does not want deal with them on a level ground. They know the iPhone has not been growing and has mostly stagnated.

    They released the app store but the iPhone has not really changed much since the release and now that stagnation is catching up to them.
  4. maflynn Moderator


    Staff Member

    May 3, 2009
    The advantage of android currently enjoys is that its getting updated frequently. The design, and features the iPhone has is fairly static and the risk of stagnation is high. Just look at how palm handled the smartphone business for years and look where they are now. They failed to capitalize on their market position but instead sat on laurels. If apple does the same, they risk repeating history.

    As for W7, because MS charges for it, and its interface looks rather bland and the product does not look sexy. I'm not too worried about W7 impacting the iPhone.

    Either way, competition is good, though apple is trying to minimize it through litigation.
  5. LeviG macrumors 65816

    Nov 6, 2006
    Norfolk, UK
    this I can pretty much agree on, the iPhone hasn't really changed since it's release except to add features already in other 'lesser' phones.

    Bland? It's a typographical based interface which is so much fresher than the icons used on the iPhone and even android - we've had icon overload now :)

    Maybe it would be better to make a better product, you know I'm sure that would be cheaper than paying the lawyers :)
  6. *LTD* thread starter macrumors G4


    Feb 5, 2009
    Even Google's best effort to date, the Nexus One, is a nice phone, but has been judged generally as such: "but it's no iPhone."

    There is no iPhone OS stagnation. It's getting an update. It expected that the iPhone OS and the iPad OS will merge - extending Apple's ecosystem of integration even further. The competition can't seem to catch up to an OS conceived over two years ago and which has gotten incremental improvements. That's how far ahead Apple is in the mobile game. The Nexus One has proven to be the iPhone-Killer than never was. Goldman Sachs estimates Nexus One sales this year to be lower than a snake's ass in a wagon-rut.

    So far, Apple's "competition", really isn't.

    As far as Apple's legal attack on HTC . . . it looks like Apple has protected patents and knew all along someone was going to come around and violate them. Apple was waiting for the most opportune time to blow the game wide open. Apple's move against HTC and its warning to potential iPhone ripoff artists is a classic attempt to consolidate an already strong position. It's what anyone would do, given the opportunity.
  7. Rodimus Prime macrumors G4

    Rodimus Prime

    Oct 9, 2006
    Keep thinking that. HTC is apple running scared. They make threats but the real question is how hard can apple push before the industry decides to push back and push back hard legally. It is odd that apple is not going after MS in anything. Hell none of the makers are going after MS for anything. But then again everyone could be scared to poke the sleeping giant because MS already has stated that if anyone one goes after one of the Windows mobile they will defend them and go after them hard. Apple could easily be more worried about the patents MS holds that could effect the core business of apple

    When I have ask the question before I get BS answers.

    What has apple change to the iPhone OS since the iPhone came out besides just adding features of lesser phones or even the hardware itself (3G, speed, and Memory bumps do not count as they are just keeping up with the times.)

    Answer to that question is Zip.

    The App store was the nicest thing and Apple has a huge lead in apps but lets face it most of those apps are crap and the must have apps apple has over it competition is falling quickly. Must have apps for example are things like face book, Twitter, IM apps and so on. Those big apps everyone wants and has. The other phones are getting them quickly or something like them so apple "killer Apps" lead is quickly dieing.

    Hardware apple failed to change. It kick the touch screen revolution into high gear but everyone is catching up and even solved some of the biggest problems with touch screen only. For example HTC track ball/pad fixes the problem of how hard it is to fine tune a choice on webs sites for links. Zoom is a pain in the rear so do not call that an excuse for not having it. Everyone can zoom but I personally would rather not have to zoom in to hit a link that has lots around it. Take for example browsing these forums my iPod I have a lot of trouble hitting the correct link for moving pages. I will bump the one next to it and zooming in to have to do it is annoying as hell.

    The other makers have also figured out that a lot of people do not want touch screen only for messaging and like the idea of a hardware keyboard. It allowing typing messages with out over 1/2 the screen being eaten up by a keyboard. They are experimenting and trying new things. RIM has the 9700a in carrier testing right now (slider touch screen phone). Relatively little is knowing about other than an unexpected photo leak and it been confirmed it is in carrier testing. RIM is the default standard for looking at hardware keyboards. Palm did a slider and some people love it. HTC has both designs floating around. Moto has a few different ideas on the hardware part and the flip hardware wise is a pretty new idea that has never been seen before.

    iPhone just has not changed. Apple pattern most of their stuff is release and only do minor changes.

    Take the iPod classic for example. Look at its first release to now and how it changed.

    Size increase of hard drive (keeping up with times)
    Changed to the click wheel. Interesting change. some loved it others hated it.
    added a color LCD. That I put under the keeping up with the times. Color LCD were getting dirt cheap by then.

    the Nano/Mini was the one that went threw the biggest changes and even then nothing major was really done other than going over to flash based memory and adding a color LCD (goes back to time argument).

    In the portable MP3 player apple had an advantage that they do not have in the smart phone market and that is no one company has set all the standers everyone is competing against. It is spread out among several. Email and hardware keyboards standard is RIM. Touch screen goes iPhone. Multitasking goes to Palm. Android has some standards it has set. Nokia is unknown in the US so I do not know what it sets.
    WP7 looks like it has the potentional to set some standards everyone is measured up to but no one is able to control them all like Apple pulled off with the iPod.

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