Originally Posted by gprovida
Job's "I don't need your money" and Cook, "its about the innovation" seems to be Apple's view. I cannot imagine Apple investing much time or effort in leveraging patents as an income stream, and if they did it would either be itty bit with little value to its customers experience or if they made it a big business it would be to allow cloning - won't happen.
They will license patents that do not directly relate to user experience and my bet on FRAND terms even if they are not SEP. Android's challenge will be to create an experience that is not copying Apple, MS and others are doing this, their success is not guaranteed, but then neither was Apple's success in 2007, in fact, it was widely panned as doomed.
MS does have a business model regarding licensing and does make good income from Android with only Google-Motorola as the remaining big hold out. Although if they Metro takes off, we might see the terms for Android get a lot harder.
this is the game plan. Stop where possible... only license when cross licensing benefits Apple, and for the most part stay out of living on royalties. The goal here is to 'get ahead, stay ahead' in selling product.
MS is all about royalties and licensing, so they play that game. apple is about Hardware/UI/Experience innovation, living a 3-5 year lead on everyone before they 'out-innovate' Apple. Getting a $20 royalty check in lieu of selling a $600 dollar phone is flat out bad business.
I do think Apple has a better chance if the market is split 3 ways, apple/android/MS. The key issue is critical mass. If Android gains critical mass, then, like MS-Windows, it shifts the came to 'just good enough at the lowest price' to stay 'in family' vs 'best possible experience.' Having 3 options will keep the markets roughly 50-25-25 in terms of market share, and I think Apple would be happy with 25% of ALL PHONES SOLD ON EARTH, if more, would be gravy. (you can assume that 75% of the world will want 'cheap' smart phones, as it models the current market given all the dumb/feature phones still in use).
This decision validates the patents so Apple can say 'cease' to currently sold android phones that are in likely violation, driving those non Samsung makers (who are sharing the remaining crumbs of the profit pie), to get to newer versions of Android that are 'patent clean' or to Windows, either way raising their costs and further lowering their profits, which makes them even less likely to innovate in HW. Because, the markets/carriers know the price points, therefore the cost won't go up.
I do think innovation will occur... MS and Android will drive new stuff into the marketplace to compete with iOS and Apple. It will just be as risky as it was for Apple when they pushed the iPhone out. Risk should be proportional to the reward.
I'm LONG AAPL, so I'm happy about the outcome. I do think US patents are awfully vague, but at least Apple (to date) is only using patents to protect product in the market, vs those who are patenting 'ideas' and then trolling for innovation that sort-of matches the idea. This needs to change (ie. patents only are good if you have a reference/real product that was built for/by you).