Advisors: Apple Should Drop Patent War, Seek Alliances with Android-Based Phone Makers
December 29, 2011 10:26 AM
Advisory firms say Apple should look into other avenues and settlements in the near future to avoid possibly having to depend on other companies' technology at some point
After a long year of
fighting mobile patent wars
with the likes of Samsung, HTC and Motorola, some are suggesting that Apple seek a different approach and start finding some common ground with the Android-based phone makers for the sake of its shareholders and ultimately its future.
Apple spent much of 2011 suing Android users for infringement, claiming that smartphone and tablet makers like Samsung were copying Apple's design and proprietary software. Apple was successful in a few instances, such as the ban on Samsung's Galaxy 10.1 tablet in both Australia and Germany, but later on, a higher Australian court
overturned the previous ruling
and a German judge made it clear that he wouldn't likely maintain the import ban on the tablet.
Apple's use of patent wars to thwart competitors is working for now, since it's costing rivals millions of dollars and poses as a distraction. Some say Apple shouldn't have to seek any sort of alliance with Android-based phone makers, such as licensing agreements, because it's the "leader."
"Apple has the patents, the money and the expertise to go to war," said Christopher Marlett, chairman and co-founder of investment bank MDB Capital Group. "I just don't see why Apple would seek détente, since they're the clear leader. Until they're hit with an injunction by Google or Samsung, they don't need to get serious about licensing."
However, Kevin Rivette, a managing partner at intellectual property advisory firm 3LP Advisors LLC, said that this approach probably isn't the best way to go. According to Rivette, Apple should look into other avenues and settlements in the near future to avoid possibly having to depend on other companies' technology at some point.
"A scorched-Earth strategy is bad news because it doesn't optimize the value of their patents -- because people will get around them," said Rivette. "It's like a dam. Using their patents to keep rivals out of the market is like putting rocks in a stream. The stream is going to find a way around. Wouldn't it be better to direct where the water goes?
"If I'm Apple, I want divided royalties [from Android licensees]."
Some suggestions for Apple include going after out-of-court settlements while dropping patent claims if Android-based phone makers agree
not to use Apple technology
for six months or even a year. Later, Apple could cut the Android users a deal such as offering Samsung more access to certain Apple technologies.
Also, Apple could attack new competitors in the market, such as Amazon with its Kindle Fire tablet, by allowing competitors like Samsung to use its proprietary iTunes service. This could boost Samsung's sales, make the company more dependent on Apple instead of Google, and thwart Amazon all at the same time.
it's unlikely that Apple will make such a move
anytime soon (if at all), some shareholders and analysts believe that stepping out of the tightly-bound proprietary model would help Apple gain access to rivals' technology while sharing its own under certain conditions. This new method could ensure a longer lifespan for the company's popular devices and software. With $81 billion in cash and investments already, it couldn't hurt the tech giant to branch out a bit.
The Washington Post
"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA
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