The End of Apple’s Thermonuclear War?

August 7th, 2014

When Steve Jobs famously said he’d go “thermonuclear” against Android because it was stolen property, and vowed to invest all of Apple’s huge cash hoard to pursue that fight, the statement was taken seriously. That Apple began to sue Samsung and other companies for patent infringement was merely the expected follow-up to the promise that Apple would protect its rights.

But that was nothing new for Apple. Years ago, Apple went after Microsoft because Windows allegedly infringed on the Mac OS, but the effort was unsuccessful, in part, because former CEO John Scully licensed parts of the Mac OS to Bill Gates at Microsoft. That didn’t help Apple in the courts, but a settlement was eventually reached with Microsoft over cross-licensing issues. These days, Microsoft continues to work with Apple in some areas, and compete in others.

Samsung is, of course, notorious for copying ideas from competitors and using those ideas to build cheaper gear. After an initial flurry of success, things haven’t worked out so well for the South Korean multinational corporation in the smartphone market. With flagging sales and profits, it has become clear that Samsung is being slapped down at both ends of the market by Apple and makers of cheap handsets in Asia.

It was also recently reported that the nuclear war with Apple has cost Samsung some one billion dollars in orders for components. Apple has been reported over time to be moving those large purchases to other vendors.

So keeping up the war with Apple isn’t helping Samsung, and that may explain why a truce may be at hand. This week, it was announced that the two companies had dropped the patent lawsuits against each other outside the U.S. That mostly leaves the remaining actions in s San Jose, CA Federal Court, before Judge Lucy Koh.

Now Judge Koh has continued to ask the two companies to just make a deal, but talks have so far gone nowhere. But you wonder why other legal actions are being abandoned, and that might indicate peace may be at hand. Or at least a reasonable state of detente.

Of course, that makes plenty of sense. Despite the losses, Samsung hasn’t paid anything, and appeals could delay resolution for years. You can still buy the Samsung gear you want, so nothing is lost, other than the money paid to high-priced intellectual property attorneys.

While I am not against someone earning a good living from their labor, this is, and ignore the pun, patently absurd. Nothing is being resolved, and the overworked courts clearly have better things to do to fill their clogged calendars.

Certainly Apple has been unfairly criticized for innovating via court action. But that’s not true, nor is it correct that the money spent on lawyers has detracted from the R&D budget, since Apple continues to spend more of its cash on creating new products and services. At this point, however, I expect most of you are bored over the back and forth patent complaints from super-rich corporations.

Yes, intellectual property should be protected and defended, but when is it all too much?

But what about that threat from Steve Jobs? Well, some might perceive Tim Cook as being more reasonable about such things, hoping to just make deals rather than have to fight competitors and alleged patent infringers in the courts. Would Jobs have attempted to cut a deal with Samsung if he were still alive and in control?

Maybe not. Yet Apple has made deals with competitors before. Don’t forget the 1997 pact with Microsoft as the most famous example. Another significant deal was made in 2006, where Apple paid Creative Labs $100 million over disputed iPod technology. But these are only two of many.

Since Cook has been in control of Apple, he’s made deals with such companies as HTC and Nokia to settle patent and licensing claims. This is the way the industry works, and Apple and Google also made a deal, mostly over issues involving the latter’s former division, Motorola Mobility, which was sold to Lenovo.

Besides, Jobs was notorious for exaggerating, and for saying outrageous things when angered.

A deal with Samsung makes plenty of sense. Samsung can just agree to work harder to avoid infringing on Apple patents, or perhaps license a few of the non-critical features. In turn, Samsung can use the money that’s saved to shore up the bottom line. But don’t forget that might also mean more component business from Apple, and that amounts to billions of dollars. It’s not a matter of pride here, but of cold, hard logic.

If a settlement happens, however, it may not be immediate. But the current agreement appears to signal that something may be in the works. Or maybe the whole issue will fade from view while the final terms are worked out.

Remember, too, that the iPhone 6 is due out next month. It has already been pretty much confirmed in the mainstream media that the Apple media event to roll out the new iPhone will happen on September 9. This promises to be a far greater product launch than ever before in Apple’s history. If Samsung’s getting a piece of the component pie for that new model — as they appear to be — wouldn’t they want to do everything possible not to upset the — well — applecart?

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2 Responses to “The End of Apple’s Thermonuclear War?”

  1. DaveD says:

    If I recall correctly, probably not, Steve Jobs and company found out that Samsung was making copies of the iPhone and iPad. Apple offered Samsung a licensing deal which it turned down which resulted in court actions. Samsung would play the long game. Apple is or has been in a hard place as Samsung does make quality components.

    My take is that Samsung refused to settle amicably. So Apple went to the path of “shaming” Samsung publicly.

  2. atlman says:

    There was never a war between Apple and Android (or Google). Apple never sued Google, tried to work out a licensing deal with Google, or even claimed that Android infringed on their IP. Apple only A) sued Samsung and B) used the threat of lawsuits to force a licensing deal with HTC (who lacks Samsung’s legal resources). They never went after Google, and they never even went after any of the other Android OEMs.

    Another reason: it would be pointless. Yes, Android was originally used to make iPhone and iPad knockoffs for commercial/marketplace reasons, but that was never Google’s original plan. (Recall that Google was working on smartphones, but with a keyboard interface similar to a Blackberry or the original Kindle, before the iPhone). Google’s goal is to create a platform (a better term than ecosystem in this case) around their cloud. Android is just a part of that, as is ChromeOS and even the Chrome browser. Where with Apple the hardware itself is the product (and the OS delivers a user experience based on the hardware) Google wants the hardware to be incidental. As a matter of fact, a major goal of Lollipop was to allow Android to perform reasonably well on inexpensive hardware, and to leverage that into Android One for inexpensive phones in developing countries (a strategy made even more viable by Microsoft’s ridiculous decision to stop making Nokia feature phones instead of using those phones to feed into Microsoft services on the back end). So 5 years from now an iPhone or iPad will be a mobile workstation or server, and an Android phone or tablet will be a dumb terminal interface to the cloud.

    Perhaps Apple knew that this was Google’s plan all along. (If so, that is no surprise as Google’s CEO did have a seat on the Apple board.) And if the Apple community has actually paid attention to Android L (Android 5.0), it is impossible to notice that its look and feel is far closer to that of a Chromebook than an iPhone or iPad. Future Android releases will differentiate from Apple (and converge towards Chrome OS and the Chrome browser until all 3 are indistinguishable regardless of what they are running on … the next big goal to allow ChromeOS to run Android apps natively and vice versa) even more.

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