Greg's Bite: Apple's problem with 'thermonuclear war'
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Greg's Bite: Apple's problem with 'thermonuclear war'

By Greg Mills

The late Steve Jobs famously stated that he intended to make "thermonuclear war over Android" since it was a stolen product.

Since then, untold millions of dollars on both sides have been spent trying to hash out Apple's valid smartphone and touch screen tablet patent rights. As Apple has become painfully aware, enforcing patent rights around the world is a very costly and highly unpredictable process. Radioactive fallout blows both ways in nuclear war.

Apple's patent litigation has sparked a bidding war the last few years over any patent remotely related to cell phones and mobile computing. Apple has patented everything patentable they can in the US and many other countries. A lot of intellectual property comes out of its R&D efforts. As the old order of dumb cell phone manufacturing companies fail, the legacy patents they hold are often the greatest asset left over when the dust settles.

The prospects for RIM and Nokia are looking particularly grim these days. Both companies tried to compete with Apple and Google in the smartphone operating system sector with proprietary operating systems. Nokia gave up on their smart OS that was in development and embraced a snake in choosing the Widows Mobile OS over Android.  

Microsoft has not been as helpful as advertised and even destroyed Nokia's chance to sell some of their first round of Windows Mobile phones.Announcing months ahead of time that the next Windows OS incarnation would not run on existing Nokia smartphones effectively made obsolete the current Nokia Windows phones a long time before the new phones could be launched. When you shoot yourself in the foot you figure you had it coming. When your software partner shoots you in the foot, it tends to sour the relationship.  

RIM has announced that the long overdue OS needed to operate their latest and greatest smartphones will come out in January. Only then will we know what major gaps there are in that platform. RIM is not likely to be around much longer as it continues to shed market share to Apple and Google. Their patent portfolio may offer investors some consolation as stock prices plummet.  

The truth is, that there just isn't enough market out there for more than two or, Microsoft hopes, three mobile operating system platforms. Apple has shown that the infrastructure required to succeed in the smartphone market is based on three legs: a decent touch screen operating system, good hardware and lots of apps.  Even with decent hardware, a flaky operating system and almost no apps may doom RIM's new products before they are even launched.  

Apple pretty much attacked the handset makers rather than Google head-on in the legal nuclear war since a lot of actual infringement is due to modifications to the open source Android OS. The military concept of "divide and conquer" seems to be working for Apple. Despite Google's stated plan for defending Android handset makers from Apple's onslaught, Samsung and the others can now see that Android is far from free. By the time you pay Microsoft and Apple off for their intellectual property, the Android OS cost factor will be noticeable on their bottom lines.

The notion of nuclear war is that you take no prisoners, you just ignite your enemies with a blinding flash of released energy and they are dead, the war is over, just that quick. The sanitized version of nuclear war seldom takes into account the spread of radiation that blows back your direction. The doomsday aspect to nuclear war has actually protected the world from it as it would certainly take a mad man to set it off. 

While I doubt Steve Jobs would easily have settled for royalties in Apple's battle with HTC, Cook is more of a pragmatic leader and he sees the long term reality that Android is here to stay, patents not withstanding. Even billion dollar judgments are not going to stop Samsung and the rest. It is better to collect cash royalties than be distracted by a costly holy war that isn't going anywhere anyway.  

All of this goes to prove that product development secrecy is a far more practical solution to the copycat problem than patents alone. By the time a patent is allowed these days, the window of technical usefulness of the technology is at least half over. Technology is advancing far faster than the intellectual property rights system that is supposed to protect innovators.  

All a patent gives inventors is the right to sue in Federal Court. The US Federal Courts move with all the speed of a glacier, and it costs so much to litigate that only the world's largest companies can do battle there. That is why the international trade commissions have become the de facto quick fix for patent disputes.   

While the actual deal between HTC and Apple was intended to be kept confidential, already tidbits are coming out that for less than US$10 per phone, Apple is blinking. For HTC's part, the money is well spent. Apple has the money and attorneys  to beat them to death, win or lose, and to keep uncertain future product development.  

Apple can possibly even block HTC's right to even sell its products in the US. The Samsung win has to be on the minds of all the Android gang. Even if Samsung is able to overcome the judgment against them, a retrial would likely come out the same way.

I suspect that had Apple been willing to have made cross-licensing patent deals earlier, the other Android handset makers would already have settled as well. Look for Samsung, Motorola and the other Android handset makers to settle with Apple. The royalty cross-licensing deals that are quite lopsided in Apple's direction will be the only hope of justice Apple is likely to see.  

The legal nuclear war is probably just about over, and while Apple didn't destroy Android as Steve Jobs hoped, it is likely that Apple could see $2 billion dollars a year coming in from Android licensing deals. This will put a lot of patent attorneys out of work.  

On another sour note, Microsoft CEO Steve Ballmer admitted that Surface sales had been "modest." That is Microsoft spin language that means, in plain English, devastatingly morbid.  The guy at Microsoft responsible for Windows has just been canned. Reviews of their critical new Windows PC OS have been very negative as well. Numerous large companies have already stated that they intend to "sit this PC OS upgrade out." Sounds like the Microsofts Vista 2.0 debacle.

I hope Microsoft is not able to hire Scott Forstall. He might actually be able to fix Windows for them.  

Finally, a good note to end on; while Google has placed my street in the "later on" category for getting the super fast 1Gig Internet service installed, I caught installers from Atlantic Engineering, the contractor installing Kansas CIty's high speed Internet fiber, stringing that magic black cable three doors down. That has to mean we will get service sooner or later here. Sooner would be fine.  

That is Greg's Bite.


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