Post 25: Google vs Apple: fierce confrontation was forced to partner

On Wednesday of this week, Florian Mueller questioned why Apple would criticize Google, the undisputed leader in the search market, for a “clearly flawed” search methodology? It makes me to think about the relationship between Google and Apple.

Although Google and Apple compete in many areas, they are still forced to cooperate. I think the enemy and friend’s deadlock will continue for some time. The relationship between Google and Apple has undergone dramatic changes in recent years, from as close as brothers into mortal enemies. Google launched the Android operating system made Steve Jobs hates its guts, which can be reflected from his biography. However, the relationship between the two Silicon Valley Giants is much more complex than this. I think up to now, they still depends on each other. Nevertheless, there are some recent indications that Apple may be trying to alienate Google. This sparked my curiosity: Will Google at much greater risk? One of the biggest separations occurred when Apple gave up Google maps and instead use an open map product on its iPad. By then, Apple started to invent its own map system, which got lots of complains from its users.

I think the relationship between Google and Apple is more complex than it appears. Many users believe that Apple is using Google search engine is because the product is the best. Although neither side would not talk about this topic, Google does pay a big fee in order to be Apple browser’s default search engine. Nowadays, Apple starts to criticize Google’s search engine. I wonder if that is anther strategy that Apple use to fight Android operating system, and if it is going to add some weight for the breaking up between Google and Apple.  

Post 24: Microsoft usher their biggest victory: patent licensing agreement with Foxconn

Microsoft and HonHai Precision Industry (also known as Foxconn) stuck a major patent deal on Tuesday of this week. The Taiwan based electronics manufacturer will pay royalty to Microsoft for a huge line of products that run on Google’s Android mobile or Chrome operating systems. Hon hai manufactures 40% of consumer electronics in the world, including smartphones and tablets that will run on Google operating systems. The patent deal is a major coup for Microsoft, which stands to make a lot of money in royalties. Microsoft has always insisted any Android phone manufacturers should get their authorization in order to access their patents. After struggling for many years, Microsoft now has 1,100 pacts with almost half of the world’s contract device manufacturers. The list includes companies like Samsung, LG, Pegatron, Quanta, Acer, HTC and Bames & Noble.

 Android is currently the largest mobile operating system in the world, with the usage of more than 750 million mobiles. According to Chairman of Google, Schmidt, Android smartphone users will exceed 1 billion in a year or two. I think such a high growth rate is mainly because Google’s strong technical capabilities and ability to grasp the mobile Internet, as well as Android’s unique design that is open and free. We have to know that Android is free just for the system itself and its source code, not involve the relevant patents.

Nevertheless, there is never a free lunch in the world. Microsoft, which had been pushed to the awkward position by Google, can do nothing about this turned to launch a “containment” war using its patents. We can see from this patent case that Android is not really free. An operating system involves lots of patents, including file management, communication management, displays, interactive, browser and other aspects. Many of these patents are needed to pay patent licensing fees to the patents owners, such as Microsoft and Apple. Google has indicated that it would not sign any patent license agreement with Microsoft and other companies, nor does it represent their OEM and partners to do these things. It means companies like Huawei and ZTE need to negotiate the patent licensing with Microsoft themselves. 

Based on Microsoft’s strategy above, as well as its determination and efforts when charging patent licensing fee from those Android phone manufacturers. I think after getting money from the big brands and small brand bulk of foundries, Microsoft has no reason to give up the chance to collect money from the rest of Android devices. On one side, Microsoft can increase its revenue from its patent licensing; on the other side, Microsoft thinks it can promotes its Windows Phone System, which I doubt whether it can be succeed. Up to now, Microsoft makes more revenue based on its patent licensing from Android rather than Windows phones. I am about seeing another Nokia, which survive mainly on its patent. I think increasing containment of Android can be seen as a positive counterbalance from Microsoft to Google, but it seems like the strategy cannot form the true meaning of difficult obstacles to Android at this point. Microsoft might need to think about more approaches to enhance its Windows phone in order to survive in the smartphone market. 

Post 23: Take a stand against patent trolls!!

Last Friday, Google, along with Blackberry, EarthLink and Red Hat, appealed to the Federal Trade Commission and Department of Justice to take stronger action against companies like Lodsys, Intellectual Ventures, and other “patent assertion entities”. They believe those companies abuse patents for financial gain and are an increasing detriment to the technology industry, costing U.S. companies alone nearly $30 billion in 2011 and $80 billion when accounting for all costs-direct and indirect. This reminds me news I got last week about how Nokia sold its 125 patents to the patent holding company, Pendrell Corp. I wonder if Pendrell will use those patents as a patent troll later. According to Matthew Bye, Google’s senior competitor adviser, patent speculation hurts the interests of consumers and patent trolls targeted more to the small companies, which hampering innovation and undermine competition in the market.

I think patent troll are key product from patent war. As the global smartphone market size expands, competition among the various mobile phone Giants are becoming more brutal. Apple and his rivals agreed that even if one of the most unassuming but very unique features in the phone might have been able to allow certain companies to gain a crucial advantage in the competition. Thus, they invested heavily in the research-related technologies; at the same time, they fight patent wars around the world to safeguard their rights, with dozens of patents to prevent competitors’ products. The only goal is forcing competitors to give up or to purchase related patent licensing. However, their practices also tell patent troll that patent war contains huge portent to make money. I admit that Google and other companies’ actions are right to fix the serious problems in the existing patent system. Nevertheless, should they all think about who start this war, and who let patent troll see that there is easy free lunch to take? I think when smartphone companies should introspect themselves when they criticize patent troll.

Post 22: Some updates about Apple this week

On Wednesday this week, Germany’s Bundespatentgericht finally ruled in Apple’s favor that invalidated in its entirety the German part of Samsung’s EP1005726 on a “turbo encoding/decoding device and method for processing frame data according to Qos”. Previously, Samsung had declared that the patent was essential to the third generation wireless standard. The ruling is expected to impact on other lawsuits between the Samsung and Apple. Samsung spokesman noted that they would decide whether to proceed with the appeal later. However, since the Germany Federal patent court made the invalidation decision, retrial could be detrimental to Samsung. 

It seems like Apple could take a deep breath; however, a not-so-good news came out on Thursday. A court in Florida declined to ‘mop up a mess’ of multiple claims since the court considered Apple and Motorola have no interest in efficiently resolving their patent lawsuit. Judge Robert Scola stated that both Apple and Motorola greatly expanded the scope of this patent litigation by, among other things, supplementing patent infringement and invalidity contentions. The court denied to give the two companies a case management conference to reduce the size and complexity of the case.

I think I am 100% agree the court’s decision. Everyone has to pay the price for his or her mistakes. Similarly, the tow companies need to mop up the mass they made by themselves instead of wasting taxpayers’ money. I still remember the stunning iPhone press conference six year ago, when Steve Jobs announced to the world:” Apple is reinventing the phone.” I don’t know how many people, like me, noted his sly smile:” Of course, we applied for more than 200 patents to protect that lead for at least five years of mobile phones.” The picture below tells us the impact of iPhone to the smartphone industry.

In order not to let competitors have been enjoying the innovation and technology, Apple tries to use patent as a weapon to block its competitor. However, it is regrettable that Apple’s approach didn’t make any competitor’s products eliminated from the market; instead, some competitors had started to fight back using the similar approach. One of these patent battle centered around Apple's slide to unlock feature, which we talked about last week. Since then, we, as consumers, started to see this endless smartphone patent war. I guess the future smartphone patent war may end in a cross license agreement, but not until the final armistice. It may need to invest more time and money. It seems like Apple start to realize this so they try to simple the lawsuits with Motorola. Although they have not been able to agree on how to accomplish the goal to drop patents and claims, at least, they both have the willing to do so, which is a good starter to settle in my opinion. 

Post 21: Nokia sells patents: Nokia expects a turn

Last weekend, Nokia has sold a block of its patents to the patent holding companying, Pendrell Corp. The sale consists of 125 patents and patent application worldwide, 81 of which have been declared by Nokia to be essential to applicable standards. The aggregate value is more than $12 billion. Pendrell has created a new wholly owned subsidiary, Helsinki Memory Technologies (HMT) to manage the patents. Nokia will receive a license to all of the patents acquired by HMT and to new IP developed by HMT. Nokia has always been the portable, embedded flash technology pioneer in the field of development and evolution of the company. The 125 patent and patent applications that are sold this time are widely used in electronic equipment, involving more than 8000 models of consumer electronic devices; such as mobile phones, laptops, and tablets.  We have to notice that this is the company’s second major sale of patent since last June.

Nokia’s series of action lead me to think of Motorola, the “big brother” in mobile communication industry. However, compared to Nokia, Motorola’s situation is more passive. Is Nokia going to be another Motorola? I hope not. Although Nokia has lost patent, the longstanding cash cow, the huge number funds Nokia get now is very useful for them. If Nokia use it properly, it can make more money through research and development. It would be extremely helpful for the mitigation of the Nokia’s short-term crisis. If Nokia wants to rise again, the most important approach is to explore new content of mobile functionality. Patent won’t save Nokia forever. Nokia’s most serious problems are the wrong judgments in the industry trend and delay in the introduction of new products. Nokia’s current situation should alert some companies that are willing to make money through patent wars. They should keep in mind that innovation is the only approach that would keep the company in the industry.