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Schmidt also expresses frustration with patent wars; disdain for Windows Phone

When it comes to Eric Schmidt, former Google Inc. (GOOG) CEO and his company's arch-nemesis Apple, Inc. (AAPL), the ties that bind are almost as strong as the ties that separate.

I. Victims of Smartphone War are the Little Guys, Says Schmidt

During much of Mr. Schmidt's time atop the Google throne; he also served on Apple's board of directors.  The two companies had a fruitful relationship and Mr. Schmidt was close friends with late Apple CEO Steven P. Jobs.  That relationship fast deteriorated when Google decided to launch Android, a Linux based smartphone platform that would eventually come to heavily outsell Apple in the smartphone market in unit sales.  Mr. Jobs expressed a feeling of "betrayal" at the decision, which not only spoke to his zealous feelings of ownership of the smartphone market, but also his strange relationship with Google and Mr. Schmidt.

In an interview with the Wall Street Journal Mr. Schmidt speaks optimistically that the pair can work out their differences with respect to patent litigation, commenting:

[Google's relationship with Apple has] always been on and off.  Obviously, we would have preferred them to use our maps. They threw YouTube off the home screen [of iPhones and iPads]. I'm not quite sure why they did that.

[But] the adult way to run a business is to run it more like a country. They have disputes, yet they've actually been able to have huge trade with each other. They're not sending bombs at each other.

I think both Tim [Cook, Apple's CEO] and Larry [Page, Google's CEO], the sort of successors to Steve [Jobs] and me if you will, have an understanding of this state model. When they and their teams meet, they have just a long list of things to talk about.

Eric Schmidt
Former Google CEO Eric Schmidt is not concerned Android will be hurt by the patent wars.
[Image Source: The Sydney Morning Herald]

Mr. Schmidt says that both Apple and Google are "doing fine" and that neither side has been able to gain ground in the patent war, much like the entrenched empires of the First World War.  He says that the real "loser" in the patent wars are small startups, which might look to create an innovative news smartphone operating system as Android VP Andy Rubin did when his startup made what would later become Android back in the middle of the last decade.  With all the lawsuits and junk patents, Mr. Schmidt argues such "garage" innovation is simply impossible in today's legal climate.

II. Former CEO Addresses Criticism, Says Microsoft is no Threat

The Google executive admits that his company long lagged Apple in terms of financially compensating developers.  He remarks, "Google Play [Google's app store] and the monetization just started working well in the last year, maybe the last six months. The volume is indisputable, and with the volume comes the opportunity and the luxury of time."

As for the perennial question of whether Google will or should favor new acquisition Motorola Mobility over its third-party Android partners, Mr. Schmidt says that would be a "terrible mistake".  He says that when the deal was announced he personally flew to meet with executives at South Korea's Samsung Electronics Comp., Ltd. (KSC:005930) -- the world's largest smartphone maker and foremost Android adopter -- to assure them that there would be no favoritism.

As for Microsoft Corp.'s (MSFTWindows Phone; Mr. Schmidt was dismissive of the operating system.  He blasts, "I have not used it, but I think that Microsoft has not emerged as a trendsetter in this new model yet."

Eric Schmidt argues Microsoft's Windows Phone is no "trend setter".

Mr. Schmidt expressed hopes that current antitrust investigations into Google's involvement in various markets would wrap up.  He says he has no interest working for the Obama administration in a government post, saying Google has always been his "home".

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RE: I have not used it....
By Master Kenobi on 12/5/2012 4:51:39 PM , Rating: 2
It's also starting to backfire with the large ununified ecosystem for Android. They really need to reign in the Android market and get some level of unification, as it stands the versions are forking all over the place.

RE: I have not used it....
By amanojaku on 12/5/2012 5:04:55 PM , Rating: 3
Here's what I don't get about the Android forking argument. MS is capable of making all versions of Windows work on nearly everyone's hardware. Actually, everyone is capable of making their hardware work for all versions of Windows. Why can't Google do the same for Android?

For that matter, why can't Apple do the same for iOS, and why can't MS do the same for Windows Phone? What's so special about a smartphone OS that differs from a desktop or server OS?

RE: I have not used it....
By Master Kenobi on 12/5/2012 5:59:06 PM , Rating: 2
In reality, nothing. However, we do need to look at the market forces of the times.

For Microsoft to win the original PC race they had to make their software run on pretty much anything, allowing anyone to roll their own or buy a PC from any of 50 different vendors. For years the PC market was largely seen as a hobby and people were working hard to outdo each other. The major players all liked to tinker and tweak, and components were very much do it yourself for anything other than the core processing piece. As the PC market evolved Microsoft was wise not to tie their software to specific hardware as the hardware and software markets advance along completely different paths, trying to keep them in lock step is impossible. All they needed to do was make sure Windows could run on almost anything, and provide an ecosystem they controlled that allowed for anyone to develop on without major overhead costs. They did an excellent job at doing just that, the dominance of Windows to this day is a direct result of that.

Now let's look at phones. Phones from the early days have always been considered disposable. You buy the phone, it is relatively inexpensive, and when it no longer works, or you want new features, you throw the old one out and buy a new one. Cell phones are an evolution of pagers, which also had no upgrade ability short of the occasional firmware flash for defects. They were throw away devices that could simply be replaced every few years as new models were developed. Back then they were more specialized from a hardware and software standpoint so it made some measure of sense. Eventually cell phones peaked and the features tapered off, until PDA's were thrown into the mix, causing the introduction of the "smartphone". The problem is that PDA's, while custom, were based on the idea of being a handheld computer, not a pager. The hardware was more general and the software merely an OS rather than a complete product, as third party vendors could develop software that could be used as well.

The modern smartphone market, and to a lesser extent regular cell phones still operate as if there were merely proprietary hardware specific pager style devices. The difference now is that smart phones are literally just a handheld computer, running in most cases the exact same hardware you can find in a laptop or desktop, just scaled down. Google has capitalized on that with Android, being the Windows of the mobile market. An OS that can run on pretty much any mobile hardware, and serve as a standard platform for applications to be developed on. The difference is that Google isn't maintaining tight control over the OS, and allowing Android to upgrade itself on its own. They instead rely on the phone manufacturers, which still see them as throw away pagers, to test, certify, and distribute new revisions of Android for their devices. Where as Microsoft would allow windows to run an installation on anything with basic computer components, Google has so far not done the same with Android, effectively allowing carriers and manufacturers to dictate. This leads pretty much every phone in a "orphaned" state since new models are released every 6 months and the old ones are simply forgotten.

Amazon is making strides with the Kindle line in this respect, but they are using a custom fork of Android to do it with. Google really needs to assert some muscle in the market and get the carriers to stop screwing around. Microsoft isn't popular enough, Apple can't supply enough, so Google easily fills in the largest chunk of the market. Carriers may fight them on it, but Google could strong arm them into allowing users to upgrade their phones.

RE: I have not used it....
By publicspace on 12/5/2012 8:02:24 PM , Rating: 2
I don't see google doing that:

planned obselesence (that lightbulb documentary?) - cell phone manufacturers don't make income off their software, they make it off their hardware.

Cyanogenmod is what you're referring to, but it will be several more years before it is as easy as Ubuntu to install.

The fact that Android is open source means that it will continue to fork, which is good imo, because eventually you will have a group making something that is superior, and free, than the bloatware that manufacturers and carriers add to their phones. Eventually new business models based on actual service instead of BS will reign superior, might be a few decades from now though.

RE: I have not used it....
By Master Kenobi on 12/6/2012 10:22:13 AM , Rating: 2
The downside is that forking also delays any chance to consolidate the android market. The longer it continues, the longer an opportunity exists for another player to swoop in and fill the gap.

"We shipped it on Saturday. Then on Sunday, we rested." -- Steve Jobs on the iPad launch

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