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Better to Jaw Than Make War

In July, we published a piece about the giants Apple and Google and how they were set to be the main protagonists slugging it out to bring in more dollars over the coming months.

This battle was and still is about maps, operating systems and smartphone technology. The bottom line is patents, who owns what and can monopolise or lucratively franchise designs, apps and components.

This always was, and even more still is, crucial terrain to win and hold. Apple may be the richest company at present, but dominance in terms of market share, devices, ideas and developments swing between the two.

Secret Talks

After Samsung was found guilty of infringing some Apple patents and was ordered by a California court to pay over a billion dollars, now comes news that the CEOs of Apple and Google have held secret talks, which according to Katherine Rushton of the Daily Telegraph (Aug 12) could have meant the two companies were ‘calling a truce in their escalating war over intellectual property rights’.

The war is costing both parties millions, and so far the main beneficiaries have been the lawyers. Litigation is expensive. Tim Cook of Apple and Larry page from Google did not get where they are by allowing cash to drain away without near-certain outcomes.

Reuters news agency also reported that lower levels of people/management within the two companies are engaged in more detailed discussions about the software that runs mobile phones. That is normally kept below the media radar.

The ownership of patents is vital in the business, hundreds of patents to give the edge to new developments, marketing existing devices and hamstringing all the opposition. Google bought Motorola Mobility for a cool $12.5 billion to secure a large number of patents.

The Storms of Wars

Simon Hill predicted a storm coming on Digital Trends in mid August, with heavyweight companies at each other’s throats for years. Court victory for one emboldens them to take action against others, Hill reckoned.

He also argued that markets evolve, everyone copies successful ideas and builds on them. ‘Human progress depends on it’, he claimed, implying that these turf wars are actually a sign of a healthy business environment of evolution and progress.

He said, and it is echoed by other commentators, that the consumers suffer when giants fight. They consider customers as ‘collateral damage’. Tech devices cost more because of licensing deals and lawsuits.

The chances of a perfect device with everything on it you could possibly want diminish as bits are divided and subdivided to fit the patents and rules. People have to mix and match, so increasing their expenditure, and will not generally pledge allegiance to one company.

He suggested companies should work together and rather optimistically urged them to:

  1. Stop putting your shareholders first (you don’t have to tell them that)
  2. Let go of your hate. That’s the path to the dark side
  3. Remember the loyal consumer who just wants a good product at a reasonable price
  4. Tech is supposed to improve our lives
  5. Instead of fighting, put your energy into making better products.

He admitted that people may think he is just a dreamer to ask all that. However, never say never. The alliances and deals of the future could look very different if co-operation is seen as beneficial to them.

Why, only recently, Freesat (owned jointly by BBC and ITV) partnered with Netflix to launch a significant new assault on the pay-TV market. This move is likely to ‘ruffle feathers’ at BSkyB and Virgin Media among maybe others. The point is, that nothing should be ruled in or out forever in technology and business.


Digital Trends, Simon Hill, Google vs Apple, 15 August 2012

Image: jonklinger