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Apple's Patent Attack: This Too May Be Overhyped

By Erika Morphy MacNewsWorld ECT News Network
Mar 5, 2010 5:00 AM PT

Many factors likely fueled Apple's lawsuit against mobile handset manufacturer HTC. Patent suits have become a competitive weapon -- one that any company dare not allow its rival to use without using it as well. Lawsuits are sometimes filed because a firm believes it's about to be slapped with one.

Apple's Patent Attack: This Too May Be Overhyped

There's a case to be made, of course, that HTC has, in fact, infringed on Apple's intellectual property.

The biggest driver, though, is probably Apple's growing concern about the growing strength in the smartphone market of Google's Android operating system.

It is hard to say exactly what Apple's motivations were, Azita Arvani, founder of the Arvani Group, told MacNewsWorld, noting that HTC manufactures devices that run Windows too.

Android is clearly on an ascendant path, though, while Windows Mobile is out, and Microsoft's newly launched Windows Phone 7 Series is still largely an unknown quantity.

Commoditization of the iPhone?

Speculation about Apple's motives leads to consideration of possible outcomes. Patent suits can take years to resolve, but the International Trade Commission can act much faster, and Apple is also taking that route, requesting an injunction against the import of a slew of Android-based handsets.

It's a high-stakes game. What if Apple loses in the end?

If the worst-case scenario were to unfold, it would not be a pretty picture for Apple or any company that had a stake in its intellectual property, said Greg Sterling, principal of Sterling Market Intelligence.

"It would mean open season on any IP -- anything could be copied," he told MacNewsWorld, noting several similarities between Apple and Android devices.

"Already, the holistic look and feel of the iPhone and the App Store has been more or less copied by most manufacturers. So, if Apple were to lose this suit, I think we would see even more duplication."

Less Licensing Money

Whatever the outcome, this suit won't make much difference to the smartphone market, argued Rob Walch, host of Today in iPhone.

"I haven't figured out what Apple stands to gain from this suit, much less what its losses will be -- it is that insignificant in the bigger scheme of things," he told MacNewsWorld.

"Frankly, the most significant impact it would have is that Apple would have either more licensing money in its bank account -- or less, depending on if it won or lost."

Apple is not competing with Android so much as it's competing with itself, according to Walch. "The new features and functions of the next iPhone is what really matters -- not this suit."

The App Store Factor

Losing its patent suit against HTC wouldn't devastate Apple, agreed Larry Downes, author of The Laws of Disruption: Harnessing the New Forces that Govern Life and Business in the Digital Age.

That's not because of the device's form factor, though, he argued.

"The iPhone's popularity today has little to do with proprietary technology, and everything to do with the enormous network of third-party software developers that write apps for the phone," Downes told MacNewsWorld.

"That drives network traffic and what economists call 'network effects,'" he said. "The more people use their iPhones, the more people who don't have one feel nudged to get one. Even if Apple loses the litigation, the network is unaffected."

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