Apple attack undermines competitors' efforts

Apple's lawsuit against HTC is just the culmination of a series of threats against competitors, says Oppenheimer analyst Yair Reiner. Industry checks are said to reveal that beginning in January of this year, Apple held a series of talks with cellphone makers in which it expressed "growing displeasure" at what it saw as infringement of iPhone concepts. Although held in private, the meetings are said to have been "blunt" in nature.

Rivals have mostly stayed clear of anything that might anger Apple, Reiner claims, thanks in part to a January 2009 statement by Apple COO Tim Cook, saying that Apple would use "whatever weapons we have at our disposal" to fight patent infringement. Multi-touch phones have been mostly absent from the market since then, with the exception of the Palm Pre, which Reiner argues was not seen as a challenge to Apple. Things may have changed with the release of two Android phones, the Motorola Droid and the HTC Eris, prominently multi-touch devices.

"Top-tier handset makers continued to avoid implementing multi-touch," says Reiner, "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."

It's speculated that HTC was chosen to endure a lawsuit because of its favoring Apple's real target, Google, the creator of Android. Reiner's checks also suggest however that the case has had a chilling effect on the development of smartphones, wrecking roadmaps as companies decide to look for software and hardware workarounds, and prepare offensive and defensive legal strategies. Some phone makers may have even been frightened into switching from Android to Windows Phone 7.

"Our checks," Reiner notes, "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." Google has also expressed support for HTC in its defense against Apple. The move could put Google in an awkward position, as it continues to have deals for search and Maps on the iPhone.

By Electronista Staff