Posted on 12/11/2009 9:18:23 AM PST by Star Traveler
Now that Apple has responded to Nokias patent lawsuit filed last October with its own countersuit today, we have a clearer picture of what the dispute is all about. As suspected, it is about money, specifically the patent licensing fees Nokia is trying to get out of Apple for wireless patents it holds and it alleges are infringed by the iPhone.
But more broadly, it is about Nokia missing the boat on the shift from conventional phones to mobile computers where the phone functionality is relegated to one of many features, and not the most important one at that. Apple lays this argument out in its countersuit, saying that Nokia tried to overcharge it on patent fees because it missed the boat on the shift to smartphones.
In Apples countersuit today, it accuses Nokia of attempting a patent hold-up. The patents in question are part of industry standards, and as such Nokia must license them under fair and reasonable terms, argues Apple. But instead, Nokia tried to put the squeeze on Apple. Apple states in its countersuit:
In dealing with Apple, Nokia has sought to gain an unjust competitive advantage over Apple by charging unwarranted fees to use patents that allegedly cover industry compatability standards.
Whether or not Apples arguments hold water is for a court to decide. But Apple takes the opportunity of this legal battle to make a swipe at Nokia as a flailing competitor. If you read between the lines of the suit, the reason Nokia is not willing to license its patents under fair, reasonable, and non-discriminatory terms to Apple is because while Apple was creating a revolutionary change in the mobile phone category with the iPhone, Nokia was sitting on its haunches:
In contrast, Nokia made a different business decision and remained focussed on traditional mobile wireless handsets with conventional user interfaces. As a result, Nokia has rapidly lost share in the market for high-end mobile phones. . . . In response, Nokia chose to copy the iPhone.
In other words, Nokia is losing in the marketplace so it is falling back on the only thing it has leftits patents. Apple is already more a profitable phone manufacturer than Nokia, and it has no intention of returning those profits via exorbitant patent fees. Now, what exactly those proposed fees are and whether they are in fact exorbitant we dont know because the numbers are not in the suit. Presumably, those will come out at trial.
Apple could lose that trial or end up paying a huge settlement fee. Both of these suits are negotiations by other means. In addition to patent fees, Nokia wants access to Apples patents so that it can try to catch up on the smartphone front. Regardless of the outcome, though, it feels like Apple has already won the bigger battle in the marketplace.
Apple’s answer to Nokia...
Wednesday, August 26, 2009
There are very few people in the tech world who annoy me quite like Steve Ballmer, CEO of Microsoft. Its not just that hes loud, dismissive and arrogant. Its that he manages to be all these things while usually being spectacularly wrong, especially when it comes to Apple. Take for example his thoughts on the iPhone from a USAToday article in 2007:
Theres no chance that the iPhone is going to get any significant market share. No chance, said Ballmer. Its a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, Id prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get.
As you might imagine, I experienced a moment of pure schadenfreude last week when Canalysis senior analyst Pete Cunningham announced that not only did the iPhone have 13.7% of the global smartphone market, but that it had surpassed Windows Mobile devices which had slipped to only 9%. Even worse for Microsoft is the fact that in the last 2 years, Apple has sold more iPhones than all the Windows Mobile devices from all its vendors combined.
I can only imagine that somewhere in Redmond, behind a very heavy door Steve Ballmer is throwing a good old-fashioned hissy fit, cursing Apple, sweating profusely and gnawing on the furniture.
The fact is that Microsoft has never truly understood Apple and that confusion has grown in part out of their unparalleled success with Windows. With Windows, Microsoft found a superior product in the Macintosh OS, produced a cheaper knock-off and then created a large ecosystem of partners for wide distribution and support. The result was global domination. Unfortunately, cheaper and more plentiful doesnt automatically win in every situation. As computers sink into every facet of daily life and the costs of consumer technology continue to drop, more and more value is being placed on finding products which are easier, more capable or simple more enjoyable to use.
Microsoft was unable to stop the runaway success of the iPod and its looking more and more unlikely that theyll be able to contain the growth of the iPhone either. Why? Because they cannot fathom a formula for success that isnt a function of feature set divided by price. Its how they think and its also how they ultimately view the products they compete against. No wonder Ballmer spends so much time shouting at the rain. From his perspective, anyone who willingly pays more for the same features is a brainwashed idiot. What he doesnt understand is that the experience of a product is more than the sum of its component parts. Its how the device works, how it feels and even more elusively, how it makes you feel. Can you think of a Microsoft product that is truly a joy to use? I dont mean one that works well, because many of their products work well enough. I mean one that is a joy to use. Neither can I. Thats because Microsoft isnt in the joy business. Theyre in the nearly as good for less business and that isnt an appeal to the heart. Its an appeal to the wallet.
So Mr. Ballmer, heres some friendly advice. The next time you feel yourself ready to mouth off about how Apple is doomed to fail because it doesnt understand the realities of the marketplace, take a moment and think about Windows Vista and the fact that roughly 50% of Apple Store customers are new to the Mac. Think about sales figures for the Zune as compared to the iPod. Think about the millions of people ditching their Windows Mobile devices for an iPhone. Think about the $35 Billion that a zero-debt Apple has sitting in the bank and all the money it continues to make made through this harsh economic downturn. Then if youre still confident that youre the smart one and Apple is the delusional one, then by all means have your say.
Just understand that with your miserable track record in predicting Apples future, theres an excellent chance that youll end up eating your own words. Better make sure theyre palatable.
Henry Blodget - Dec. 5, 2009, 8:32 PM
Jenna Wortham explains the power of Apple's mobile app platform in a long article in the NYT.
Apple has the opportunity to do in mobile what Microsoft did on the desktop: Own the standard platform upon which every popular application is based. The irony of this cannot be lost on Microsoft, which has flubbed its own opportunity to do the same.
Google's Android could mount a strong charge here because it's hardware agnostic (the same way Microsoft Windows is, ironically). But otherwise it's Apple's game to lose.
Jenna Wortham:
IAN LYNCH SMITH, a shaggy-haired ball of energy in his late 30s, beams as he ticks off some of the games that Freeverse, his little Brooklyn software company, has landed on the iPhone App Stores coveted (and ever-changing) list of best-selling downloads: Moto Chaser, Flick Fishing, Flick Bowling and Skee-ball.
Skee-ball, Mr. Smith says, took about two months to develop and deploy and then raked in $181,000 for Freeverse in one month. The companys latest bid for App Store fame? A game featuring a Jane Austen character in a lacy dress who karate-chops her way through hordes of advancing zombies.
Theres never been anything like this experience for mobile software, Mr. Smith says of the App Store boom. This is the future of digital distribution for everything: software, games, entertainment, all kinds of content.
Steve Jobs and Steve Ballmer
http://www.youtube.com/watch?v=dR8SAFRBmcU
The only problem with Microsoft is that they have no taste. They have absolutely no taste! [Steve Jobs]
They [Microsoft] dont think of original ideas and they dont bring much culture into their product. [Steve Jobs]
I have a problem with the fact that they [Microsoft] make really third-rate products. [Steve Jobs]
I will admit, quite frankly, that I think Windows, today, is probably four years, behind three years behind, where it would have been had we not danced with IBM for so long. [Steve Ballmer]
Blame the victim and paint them as the bad guys. I just dunno if that's gonna work.
Ummm Android will win that battle because it’s free.
I just dunno if that's gonna work.
There's usually some good legal analysis on Groklaw, so I'm going to see what they say about the strategy, when it shows up there... :-)
They were really right on the money with the Psystar cloner, too... :-)
Apple Wins Like a Champ - Psystar is Toast -- What? You're Surprised?
Ummm Android will win that battle because its free.
Yeah, I hear Android is going for the "porn".... LOL... in order to win against iPhone...
Android goes for iPhone weak spot: porn apps
[... I hear a lot of porn is free, too... :-) ...]
And Apple should remember that the "fair and reasonable fees" works both ways.
And Apple should remember that the "fair and reasonable fees" works both ways.
Ummmm..., what patented ideas that Apple has -- has it been overcharging other companies for the license to use...
For example on Firewire (IEEE 1394), you can see that it wasn't charging too much there, but it ended up dropping it in the long run.
However, the royalty which Apple and other patent holders initially demanded from users of FireWire (US$0.25 per end-user system) and the more expensive hardware needed to implement it (US$1$2), both of which have since been dropped, have prevented FireWire from displacing USB in low-end mass-market computer peripherals, where product cost is a major constraint.[3]
Do you have some other licensing costs that were somehow exbortitant to some other companies licensing from Apple?
Yeah, but that one was pretty blatant on the part of Psystar. I think *I* could have won that case for Apple!
That is what will win it.
Well, heck, Android may go for porn, as it appears that this might be their marketing strategy... LOL...
BUT, I saw another phone that has the iPhone totally beat! No kidding... once you see the promo video of it, you'll want it too -- even if you have an iPhone...
It's in German for the most part, but you can see the demo of the phone anyway.
... from the FReeper thread - Truth about the new German xPhone...
Yeah, but that one was pretty blatant on the part of Psystar. I think *I* could have won that case for Apple!
Yeah..., you and me both... LOL...
Fri, Dec 11, 2009
Well this is certainly getting interesting. In late October youll recall that Nokia sued Apple for infringing on a number of patents pertaining to technologies that help make devices compatible with wireless LAN standards and GSM and UMTS networks. Nokia argues that Apples iPhone has been infringing on their patents since it was first released in 2007.
Earlier today, Apple issued a press-release announcing that theyve countersued Nokia for infringing on 13 Apple patents, including the iPhone user interface. Other companies must compete with us by inventing their own technologies, not just by stealing ours, said Bruce Sewell, Apples General Counsel and senior vice president in the press release.
Apples lawsuit reads in part:
As Anssi Vanjoki, Nokias executive Vice President and General Manager of Multimedia, stated at Nokias GoPlay event in 2007 when asked about the similarities of Nokias new offerings to the already released iPhone:[i]f there is something good in the world, we copy with pride. True to this quote, Nokia has demonstrated its willingness to copy Apples iPhone ideas as well as Apples basic computing technologies, all while demanding Apple pay for access to Nokias purported standards essential patent. Apple seeks redress for this behavior.
For its part, Apple denies infringing upon any valid portions of Nokias patents while also denying that Nokias patents are essential to any industry standard. It goes on to write that even Nokias patents are found to be valid and part of an industry standard, Nokia has refused to license those patents on fair, reasonable, and non-discriminatory terms.
In dealing with Apple, Nokia has sought to gain an unjust competitive advantage over Apple by charging unwarranted fees to use patents that allegedly cover industry compatibility standards and by seeking to obtain access to Apples intellectual property. Nokia needs access to Apples intellectual property because Nokia has copied and is now using that patented technology.
Through the present suit, Nokia has asserted unfounded claims of infringement and breached licensing commitments it made to license on [fair, reasonable, and non-discriminatory] terms all patents that it claimed were necessary for a party to practice standards. Nokia has also violated those licensing commitments by demanding unjustifiable royalties and reciprocal licenses to Apples patents covering Apples pioneering technology - patents unrelated to any industry standard. This attempt by Nokia to leverage patents previously pledged to industry standards is an effort to free ride on the commercial success of Apples innovative iPhone while avoiding liability for copying the iPhone and infringing Apples patents.
Not surprisingly, Apple is looking to have Nokias original complaint dismissed with prejudice, along with payment for attorney fees and damages from Nokias infringement.
If you recall, when Steve Jobs first introduced the iPhone, he made a point of saying that they patented the hell out of the device, so itll be interesting to see where this case takes us. Were guessing settlement.
CUPERTINO, CaliforniaDecember 11, 2009Responding to a lawsuit brought against the company by Nokia, Apple® today filed a countersuit claiming that Nokia is infringing 13 Apple patents.
Other companies must compete with us by inventing their own technologies, not just by stealing ours, said Bruce Sewell, Apples General Counsel and senior vice president.
Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market with its revolutionary iPhone.
Press Contacts:
Steve Dowling
Apple
dowling@apple.com
(408) 974-1896
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