Apple-HTC Patent Suit and the iPad

When Apple filed its patent infringement action against HTC in both the United States District Court for Delaware and the United States International Trade Commission, most pundits saw the Apple litigation as an indirect means of going after Google and its success in penetrating the smartphone market with its Android operating system.  But perhaps the ultimate goal of the Apple patent strike against HTC was protection of iPad domination of the tablet market and its lucrative content and ad space.

Many saw HTC, a major telephone hardware manufacturer, as merely low hanging fruit that Apple could attack as an indirect means of reaching Google.  Despite the fact that the defendant in the litigation is a telephone hardware manufacturer, most of the 20 patents Apple alleges HTC violated appear to be software patents related to various aspects of the Android operating system employed on many HTC Android telephones, as well as phones from other manufacturers such as Motorola.  For this reason, most commentators viewed the Apple litigation strike as a shot across the bow of the Google destroyer in the telephone wars — an indirect means of attacking the relentless Google warship and its penetration into the telephone market with both iys Android operating system and its own Nexus One hardware (also manufactured by HTC).

But what if the Apple strike against HTC has almost nothing to do with telephones and everything to do with Apple’s new paradigm shifting iPad?  The timing of the filing of the Apple complaint, within 3 weeks of the launch of the IPad would suggest that Apple sought to protect the iPad, rather than the IPhone.  After all, the Android operating system, with many of the alleged infringements, has been on the smartphone market for at least 18 months without any hint of objection from Apple, despite competing with the iPhone.  The best of the current crop of Android phones, Google’s Nexus One, launched two months before the litigation and even allegedly outsold the iPhone in February of this year without any vocal outcry from Apple.  While the Apple suit might be a Cupertino temper tantrum over the success of the Nexus One, the target of the litigation and the timing of the suit appears to suggest instead an in terrom strike to scare away competition in the computer tablet market.

While HP and others have recently promised Windows based tablets, repeated efforts in this direction have always failed ever since Bill Gates promoted the idea at the Comdex show in Las Vegas in 2001.  Thus, Windows tablets are not likely to pose any major competition to the iPad.  The best available operating system to compete with the iPad in the tablet market is probably Android.  While some limitations in the Android license may pose problems in creating tablets above 7 inches, a number of innovative firms appeared quite ready to invade the tablet space with some very innovative and, possibly, lower priced tablets running on the Android operating system.  Among these is the Notion Ink Adam, featuring the new Tegra 2 chipset and the first tablet to offer a Pixel Qi display.   This tablet, unveiled at CES 2010, caused quite a bit of buzz and has captured the attention of bloggers long before its scheduled release this summer.  Like other Android based tablets poised to take on the iPad, the Indian developers of the Adam were attracting favorable attention  and one would suspect considerable venture capital.  Of course, it helps tremendously that the Adam’s reliance on open source operating systems may permit it to offer a more fully featured tablet device at a price far lower that the rather pricey iPad.  Other Android entries into the tablet space also appear to be coming from smaller developers.

One of the big criticisms of the iPad is the closed, walled-garden nature of the device and its operating system.  With no USB ports, content can only be secured for the iPad through Apple’s own iTunes Music Store.  Equally beautiful and functional tablets running an open operating system like Android complete with output and input abilities through USB ports constitute a major threat to Cupertino’s search for complete tablet dominance with the iPad, together with complete marketing control of all content through the iTunes Music Store.  If those Android tablets become available at half or two-thirds the price of an iPad and open limitless opportunities to secure content from sources other than the iTunes Music Store, Apple’s complete dominance in the tablet hardware , content, and advertising space is severely threatened.  Android therefore poses a major threat, not the iPhone, but to Apple’s control of the tablet space

When you juxtapose the potential Android threat to iPad dominance with the fact that competition in the smartphone arena was heavy long before the Apple patent shot across HTC’s bow, it appears that the real target of the Apple patent strike litigation, perhaps, is not HTC, but smaller developers and manufacturers who seek to bring competing devices to the tablet space using Android, the same operating system that Apple alleges HTC employed in its allegedly infringing phones.   If you were a small developer from India, like Notion Ink, and your proposed tablet, the Adam, ran Android, you might think twice about bringing it to market given the vast disparity of litigation resources you could bring to any potential patent conflict with Apple?  Worse still, unlike Google, smaller manufacturers and developers do not have a vast technology patent portfolio of the type often used by larger tech companies to defend against such strike suits in the patent wars.

Many thought Apple’s patent strike against HTC odd because it alleged mostly infringement of software patents against a hardware manufacturer, particularly when some of the alleged infringing software was actually part of Android.  That is precisely why some pundits saw the Apple strike suit as a veiled attack on Google.  If, however, the real purpose of the suit was actually hardware domination of the tablet market, together with its lucrative content and advertising space (witness the recent announcement of iAds), then Apple chose its target with military precision.  Perhaps it aims to sink Android competition to the iPad, not the manufacture of smartphones that compete with its iPhone.  By suing an Android manufacturer for patent infringement, Apple no doubt has created considerable fear and concern among Android tablet developers, particularly smaller startups like Notion Ink, about bringing to market any competing tablet running Android.  Google may not have been the real target of the Apple patent barrage, considerable circumstantial evidence suggests Android tablet manufacturers were!


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