It’s sometimes hard to remember that smartphones are still a recent phenomenon with the first devices to be categorised as such being less than a decade old. Sure there were phones before that which you could say were smartphones but back then they were more an amalgam of a PDA and a phone more than a seamless blend between the two. Back then the landscape of handset providers was wildly different, one that was dominated by a single player: Nokia. Their failure to capitalize on the smartphone revolution is a testament to incumbents failing to react to innovative upstarts and their sale to Microsoft their admittance of their fault. You can then imagine my surprise when the now much smaller company is eyeing off a return to the smartphone market as pretty much everyone would agree the horse has long since bolted for Nokia.
The strategy is apparently being born out of the Nokia Technologies arm, the smallest branch out of the three that remained after the deal with Microsoft (the other two being its network devices and Here location division). This is the branch that holds Nokia’s 10,000 or so patents and so you’d think that they’d likely just be resting on their laurels and collecting patent fees for time immaterial. However this section has been somewhat busy at work having developed and licensed two products since the Microsoft deal. The first of which is z Launcher an Android launcher and the N1 a tablet which they’ve licensed out to another manufacturer whom they’ve also lent the Nokia brand name too. The expectation is that future Nokia devices will likely follow the latter’s model with Nokia doing most of the backend work but then offloading it to someone else to manufacture and ship.
There’s no doubt that Nokia had something of a cult following among Windows Phone users as they provided some of the best handsets for that platform. Their other smartphones however had no such following as their pursuit of their own mobile ecosystem made it extremely unappealing to developers who were already split between two major platforms. Had Nokia retained control of the Lumia brand I could see them having an inbuilt user base for a future smartphone, especially if came in an Android flavour, however that brand (and everything that backed it) went to Microsoft and so did all the loyalty that went with it. Nokia is essentially starting from scratch here and, unfortunately, that doesn’t bode well for the once king of the phone industry.
Coming in at that level you’re essentially competing with every other similarly specced handset out there and, to be honest, it’s a market that eats up competitors like that without too much hassle. The outsourcing of the actual manufacturing and distribution means that they don’t shoulder a lot of the risk that they used to with such designs however it also means they have little control over the final product that actually reaches consumers. That being said the N1 does look like a solid device but that doesn’t necessarily mean that future devices will share the same level of quality.
Nokia is going to have to do something to stand out from the pack and, frankly, without their brand loyalty behind them I’m struggling to see what they could do to claw back some of the market share they once had. There are innumerable companies now that have solid handset choices for nearly all sectors of the market and the Nokia brand name just doesn’t carry the weight it once did. If they’re seriously planning a return to the smartphone market they’re going to have to do much more than just make another handset, something which I’m not entirely sure the now slimmed down Nokia is capable of doing.
Have you ever read a software patent? They’re laborious things to read often starting out by describing at length their claims and then attempting to substantiate them all with even more colourful and esoteric language. They do this not out of some sick pleasure they get from torturing people who dare to read them but because the harder it is to compare it to prior art the better chance it has of getting through. Whilst a Dynamic Resolution Optimizer Algorithm might sound like something new and exciting it’s quite likely that it’s an image resizer, something that is trivial and has tons of prior art but, if such a patent was granted, would give the owner of it a lot of opportunity to squeeze people for licensing fees.
Indeed this kind of behaviour, patenting anything and everything that can be done in software, is what has allow the patent troll industry to flourish. These are companies that don’t produce anything, nor do they use their patents for their intended purpose (I.E. a time limited monopoly to make use of said patent), and all they do is seek licensing fees from companies based who are infringing on their patent portfolio. The trouble is with the patent language being so deliberately obtuse and vague it’s nigh on impossible for anyone creating software products to not infringe on one of them, especially if they’re granted for things which the wider programming community would believe would be obvious and trivial. It’s for this reason that I and the vast majority of people involved in the creation of software oppose patents like these and it seems finally we may have the beginnings of support from governmental entities.
The New Zealand parliament just put the kibosh on software patents in a 117-4 vote. The language of the bill is a little strange essentially declaring that any computer program doesn’t classify as an invention however any computer application that’s an implementation of a process (which itself can be patented) is patentable. This legislation is also not retroactive which means that any software patents granted in New Zealand prior to its passing will remain in effect until their expiry date. Whilst this isn’t the kind of clean sweep that many of us would have hoped for I think it’s probably the best outcome we could realistically hope for and the work done in New Zealand will hopefully function well as a catalyst for similar legislation to be passed elsewhere.
Unfortunately the place that it’s least likely to happen in is also the place where it’s needed the most: the USA. The vast majority of software patents and their ensuing lawsuits take place in the USA and unfortunately the guaranteed way of avoiding infringement (not selling your software there) means cutting out one of the world’s largest markets. The only way I can see the situation changing there is if the EU passed similar laws however I haven’t heard of them attempting to do anything of the sort. The changes passed in New Zealand might go a ways to influence them along the same lines, but I’m not holding my breath on that one.
So overall this is a good thing however we’re still a long way off from eradicating the evils of software patents. We always knew this would be a long fight, one that would likely take decades to see any real progress in, but the decision in New Zealand shows that there’s a strong desire from the industry for change in this area and people in power are starting to take notice.
I haven’t talked about the Apple vs Samsung court case that’s been raging on for the past year mostly because I didn’t feel like there was anything interesting to say about it. Usually these kinds of court cases are business negotiations that have gone south and they’re just using the legal system to figure out who should be paying who for what. The Apple vs Samsung case was slightly different as it appeared to be more of a move from Apple to try and block Samsung out of the USA market, one where they’re starting to get quite the foothold thanks to their flagship Galaxy devices selling like the proverbial hotcakes. Samsung isn’t completely innocent in this regard either, pulling the same kind of tactic in other markets.
Of course the news recently broke that after 2 days of deliberation the jury on the Apple vs Samsung case returned the verdict that Samsung had indeed wronged Apple and were awarded a cool billion dollars in damages. The damages were broken down on a per device level based on the jury’s judgement of how much they infringed on what the appropriate damages would be. No matter what the decision in the case ended up being there was always going to be something of a media storm following it, and boy was there ever.
On the surface it didn’t look like the fallout from the case was doing Samsung any favours. Trading for Samsung stock closed 7% down on the day after the announcement was made, wiping $12 billion of value from the company and making the fine look like a pittance by comparison. Of course the verdict isn’t completely finalised yet with a potentially lengthy appeals process (and issues with the way the jury decided the verdict could have the whole thing thrown out) to come but there’s no denying that the immediate down turn in the confidence that the market has in Samsung will affect them adversely in the short to medium term.
However Apple may have set themselves up for an unlikely consequence: they put Samsung in the same league as them.
Us high tech geeks could rattle off the differences between Apple and Samsung’s products for hours and realistically they’re completely different beasts. However with this very public lawsuit Apple has gone on record saying that Samsung is basically equivalent to them and that hasn’t gone unnoticed by the general public. Indeed this was very much the same way Samsung managed to establish itself as a dominant player in the LCD TV business, often being touted as the cheaper version of the higher quality Sony¹. The same thing appears to be happening in relation to Apple with Samsung more than happy to be second fiddle in such a large market. Indeed the numbers back this idea up, especially when you look at the sales figures of their recent flagship product, the Galaxy S3.
I didn’t come up with this idea myself however, that credit goes to two posts I caught on Google+. It still might be wild speculation but the history of similar things happening with Samsung and other competitors does lend some credence to the idea. Whether Samsung can capitalize on that, especially with the market looking down on the ruling, is something that we’ll only know as time goes on. Their stock hasn’t tumbled any further though so there’s some indication that the initial fine shock might’ve been just that.
Personally I feel it highlights the problems with the USA’s current patent system more than anything else. Instead of them being used to encourage innovation, as was their original intent, they’re now far more likely to be used as weapons in big lawsuits or in negotiations over licensing fees. How we go about solving that problem isn’t something I have a good answer for but until we do we’ll continue to have these kinds of high profile cases which tie up resources that could be put to much better use.
¹I will freely admit that I don’t have anything solid to back this assertion up apart from the countless hours of research I poured into finding the best TV for the right price all those years ago. A cursory search finds threads like this one which echo the sentiment I’m referring to.
Nothing can create a stir in the technical press more than when one tech giant decides to buy out another one. The last such buy out I can remember is when Microsoft said they were going to buy Skype which spurred a good week of articles from all my usual sources. There was also a whole bunch of people blaming Microsoft for ruining Skype as the service hit some troubles soon after the deal was announced, forgetting that the deal still hadn’t been finalized and Microsoft still had no say in how it was operated. Today’s buyout news has triggered a veritable tsunami of news, blog posts and speculation and this time around it’s not just all fluff.
As it turns out Google is going to be buying Motorola’s wireless division (and what then shall we call them: Googorola, GoogMo or maybe Gotogola?).
The news flooded my feed reader with dozens of articles ranging from simple regurgitated press releases to full blown analysis and speculation of what this will mean for both companies’ futures. I then spent the next hour or so devouring and digesting these articles to see if I could make sense of the massive reaction that this proposed buy out has triggered. From what I can tell it boils down to three key issues: Motorola Mobility’s patent war chest, Google’s desire to be a handset manufacturer and the effect that this is going to have on the Android platform. These are all rather meaty issues and whilst I might not have the cred of the larger blogging institutions I felt like I should throw my hat into the ring anyway.
The issue that everyone seems to mention at least once is Motorola Mobility’s rather impressive collection of patents, with 17,000 granted and 7,500 currently pending. The trove includes such pearlers as the mobile phone itself and patents that already have licenses with some of their biggest rivals (namely Nokia and Apple). On the surface acquiring the vast patent archive of Motorola Mobility seemed to be a reaction to Google losing the recent bidding war for the Nortel patents that were up for sale. Indeed Google did complain rather vocally that the partnership of mega-corps that did get those patents (some direct rivals, some users of Android) were only doing so in order to take down Android. However Google never appeared to be totally serious about acquiring those patents anyway, bidding strange amounts like pi and other mathematical constants. They were also apparently approached by the winning consortium to bid along with them (by Microsoft no less) which they turned down and sparked a rather public flamewar between them.
It then follows that Google, whilst not happy that it could have several companies breathing down its neck, didn’t just up and buy Motorola because of it. In fact it looks like Motorola has been under some pressure to monetize it’s vast patent cache for some time, even courting other big names like Microsoft. In the end they settled on Google as Motorola Mobility will retain some level of autonomy whereas Microsoft, still fresh from minting their deal with Nokia, was really only interested in their patents. Had Motorola gone with Microsoft in that instance it would’ve been a massive blow to the Android platform as a whole, as Motorola commands a respective 29% of that market. Motorola’s patents then are more a defensive barrier than anything else but that’s not the sole reason Google bought Motorola Mobility.
Google’s attempt to revolutionize the handset market, whilst commendable in their own right, has faced some problems when trying to break current industry norms. The Nexus One was meant to be sold unlocked for a mere pittance, as low as $99 outright, but the carriers would have none of that leaving Google handcuffed and the Nexus One made available at industry level prices. Their follow up phone Nexus S, whilst an impressive handset in its own right, suffered the same fate and it seemed that Google’s hope of changing the mobile game was just pure fantasy.
However with their acquisition of the Motorola Mobility section they now get the ability to manufacturer handsets themselves as well as getting all the carrier relationships which, up until now, they have sorely lacked. This means that Google now has a lot more leverage when it comes to negotiating with carriers and they could possibly use this in order to see their original dream of cheap, unlocked handsets realised. I doubt that we’ll see anything like that for a while to come yet (the deal has to pass a lot of scrutiny before it’s official) but the potential for such a thing to happen is far greater with Motorola under Google’s belt than it was without it.
The final issue that everyone has picked up on is what this acquisition means for the greater Android platform. Now you’d be forgiven for thinking Motorola isn’t that big of a deal, I certainly haven’t considered any of their phones and that holds true for my social group anecdotally. However they are indeed a powerhouse when it comes to Android, commanding some 29% of the market placing them second only to HTC at 35%. Google’s acquisition of them then means that they now have a direct influence over a sizable chunk of the Android market and this has had some speculating that this would mean trouble for other handset manufacturers.
For the most part though the other Android handset manufacturers have been positive about the acquisition and Google has stated that it wants Motorola to operate mostly independently. This is probably the best idea for Google as Android’s popularity can be easily attributed to those handset manufacturers and upsetting them in favour of Motorola would do far more harm than good. Many analysts have also speculated that the Googorola partnership will mean that Motorola will get preferential treatment over other manufacturers but I can’t see Google being that short sighted. The Motorola acquisition seems to be more of a defensive move to save the wider Android platform, not Google’s first steps into dominating the platform that others have helped make popular.
The Motorola Mobility acquisition looks like a positive move for Google, Motorola and the Android platform. With Motorola’s extensive patent chest Google will be able to defend the Android platform against any other mobile player that would seek to dethrone it. They also now have enough power to be able to realise their dream of cheap, unlocked handsets for the masses, leveraging off Motorola’s deep carrier relationships. Of course we’ve still got a while to wait before this deal is finalized and we start to see the fruits that this relationship will bear but I’m positive this will lead to good things for everyone involved.