Google Getting Into Ring In Patent War; Apple Not Likely To Settle; Mobile Devices Consider Non-Android Options
"We have seen an explosion of Android devices entering the market and, because of our successes, competitors are responding with lawsuits as they cannot respond through innovations"
Those words came from Eric Schmidt, Chairman of Google, when asked about the patent wars between Android foes and Google allies. Specifically, he was referring directly to the ITC judgment againt HTC that it had voilated two of Apple's patents (Apple has more than a dozen more patents it accused Android makers of violating).
Looks like open war is coming between Apple and Google. Today, Eric Schmidt of Google vowed to support HTC and promised that they will prevail in its struggle against Apple. From all indications, it'll be an epic war or empty words in a moment of fleeting bravo encouraged by a friendly crowd. Which will it be?
I came from a background where you work hard, you use your smarts, and you prevail. And if you earn it (innovate it), it's yours. However, the corporate world is rarely that simple. Life isn't that simple. I'm sure there is a lot of Android that you can easily see that was copied from Apple.
Then, the same can be said of Apple copying someone else.
And with lawyers involved, the truth is rarely black and white. What I do know is that Google entry into the patent war, if its heart is truly in it, could boost the morale of the Android camp.
Promises Fulfilled And Mobile Nirvana. When Google announced the Open Handset Alliance back in late 2007, none of its partners thought they would be in this predicament. It was after all, "open". Years later, Android is a thriving mobile platform and has generated tens of billions in profit for device makers and Google.
It appears that there is nothing to stop Android from gaining the kind of dominance that Microsoft enjoys with Windows on the PC. In fact, there is still a chance the patents will do nothing except to slow the Android advance but for a moment.
And Android served as a balance to the walled garden that is Apple's iPhone and iTunes ecosystem. Ironically, Apple became the boogeyman or Big Brother that they railed against in their original ad in 1984 based on the theme from the book 1984 by George Orwell.
Microsoft was stumbling through to find an answer to the iPhone and Android that at times lacked leadership from its executives. RIM was convinced that messaging and emails was all that it needed to excel at. So long as the enterprise users were happy with them, all will be fine and they can bring that to the consumers. And then there's Palm with its innovative Web OS. If there is ever an MBA course on bad time, Palm would be a case study as it releases product after product at the same time its larger competitors release theirs (Pre released just as the iPhone 3GS came onto the market)
Perception And Promises. Schmidt's words could be timed to allay fears of partners of the increasing cost of patent payments and litigations from Android in their mobile devices. And timing is everything here and Google has to proceed carefully. There is going to be a lot of hand-holding by Google and it'll cost them as well if Google puts money where its mouth is.
Google itself is being sued by Oracle for Java damages, Microsoft is asking just about everyone who makes Android device a certain amount per device now, and, then there is Apple. More than these ongoing issues, there is the perception that Google cares nothing beyond selling ads through Android. After all, it is how it makes money from mobile and search.
How can this perception be correct? Though Google made the initial $1 billion bet on Nortel's 6,000+ patents, they failed to win the bid. Instead, the bid went to a coalition head by none other than Apple. Only Intel joined Google. All the way, Google's follow-up bids were of numbers that really did not give anyone a sense that it was serious about the process. Pi as a bidding number?!
Furthermore, one has to ask where were the rest of the Open Handset Alliance members? More than a few of them had deep pockets that could have contributed to help Google secure a winning bid. Perhaps, it was a sign that they see a vision of the future that did not favor Google. Take Sony, an Android device maker, that sided with Apple instead of its mobile OS benefactor.
If Google and the Open Handset Alliance was not serious about winning the Nortel patents, what does it say about patent protection and Schmidt's words that HTC will prevail against Apple's patent suits?
Apple, Apple, Apple. Perhaps, Google senses something that going on here and that's why Schmidt had to speak up when he did.. Many analysts, especially those in Asia, believe that this patent spat between Apple and Android device makers, are about money and cross-licensing of patents. Once the amount is agreed upon, things will return to normal.
Microsoft might be content with nickel-and-diming the Android makers but that cannot necessarily be said to be the case with Apple. When Steve Jobs introduced the iPhone back in 2007, he made sure to point out that Apple made sure it patented everything it can to protect it.
First, it isn't in Apple's DNA to share. Steve Jobs isn't interested in a couple of billion dollars a year.
Second, Apple wants to preserve the uniqueness it perceives that is specific to the iOS, iPhone, and iPad. Without it, why would anyone want to buy Apple product?
Third, if Apple does allow some patents to be licensed, they will exact their pound of flesh. And they'll only offer those that doesn't allow Android devices to gain parity with the iPhone.
There is a chance that Apple might settle with some Android device makers. One quickly come to mind is Samsung. Apple relies on Samsung for many parts like chips, memory, and screen for its iOS devices. It could leverage that co-existence along with its ITC win against HTC against Samsung for other concessions
Unfortunately for anyone like, they have very little to offer Apple.
Cloudy Path To Resolution.For the reasons above, HTC investors are not buying HTC's brave front or their attempt to stem their stock price with buybacks. Nor as other Android device makers certain about the future.
So muddy is the Android situation that some device makers are taking another look at other options such as Windows Phone. After all, if they have to pay Micrsoft patent royalty, they may as well consider Windows Phone while avoiding legal battles inherent to Android.
Some Chinese device makers have already been said to looking to Microsoft as an option. Meego might also get another look as well. Perhaps this was why Intel sided with Google during the Nortel bids. Intel probably saw the writing on the wall and predicted an increase interest in its mobile platform.
For the most part, Apple and Google avoided direct confrontation. These legal fights so far have been like proxy wars the US and the USSR fought during the cold war. But it looks like Google is going to draw Apple out into an open fight.
Things could quickly get ugly. Things will escalate to the level no one imagined. I can't wait.