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Apple lawsuit is scaring the hell out of smartphone makers

Paul Nesbitt


Apple's lawsuit against HTC has left most of the smartphone industry delaying plans for new handsets and planning workarounds to avoid Apple patents, with some even reconsidering their commitment to Google's Android.

That's the assertion of Oppenheimer analyst, Yair Reiner, citing 'industry checks'. And Reiner believes that any second thoughts by the makers of Android handsets – like HTC and Motorola –  could end up benefiting Microsoft, whose Windows Phone 7 OS looks like a plausible alternative.

In a report to clients, Reiner said that Apple has been in discussions with 'tier-1 handset makers' since January 2009 about its displeasure at what it regards as infringements of its intellectual property (IP) relating to the iPhone.

Indeed, it was back in January 2009 that Apple COO Tim Cook, in a conference call with analysts, issued a blunt warning: 'We will not stand for having our IP ripped off and we'll use whatever weapons we have at our disposal. I don't know that I can be more clear than that,' he said.

At the time Cook's warning was widely interpreted as being aimed at Palm, which had announced its own iPhone-like handset, the Pre, which sported a mult-itouch user interface.

Reiner said that through 2009 other handset vendors, including Nokia, Samsung and LG, delayed releasing multi-touch smartphones. Palm, it turned out, was too small to concern Apple.

Then towards the end of last year, HTC and Motorola with its Android-based Droid released fully featured mutli-touch handsets. It probably didn't help that in the US Motorola and Verizon launched a series of aggressive TV commercials, which attacked and mocked the iPhone.

'Top-tier handset makers continued to avoid implementing multi-touch, but Apple could safely assume that they were hanging back to gauge Apple's response to Motorola and HTC. If there wasn't one, the OEMs would likely read the silence as a green light, especially after Google also moved to enable multi-touch on its Nexus One phone,' wrote Reiner.

'It was likely in order to counter that perception that Apple began reaching out to handset OEMs in January and explaining in no uncertain terms that it was now ready to do battle–and not just on multi-touch. It was ready to press its case along a number of axes that had made the iPhone experience unique, from the interpretation of touch gestures, to object-oriented OS design, to the nuts and bolts of how hardware elements were built and configured.'

In other words, Apple's case was inevitable and designed to assert its IP rights over a range of iPhone technologies and not just multi-touch.

'Few OEMs believe that simply staying clear of multi-touch can, on its own, avert Apple's wrath. We believe a lot of software and hardware is being sent back to engineering departments for work-arounds,' Reiner asserted.

And Reiner believes that smartphone OEMs, who have already been alienated by Google's decision to release its own brand Nexus One phone, are now actively looking alternative OSes.

'Our checks indicate that Microsoft has been quick to sniff out this burgeoning opportunity and has begun to aggressively promote the strength of its own IP portfolio, as well as its willingness to join battle with customers that come under IP attack,' wrote Reiner.

 

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