Apr 262012

No one with any reasonable sense of the smartphone timeline still thinks that Google didn’t pull an about face with the design of their Android handsets when the iPhone was released. There’s ample photo evidence.

As if another nail was needed in that coffin, during yesterday’s testimony at the Oracle v. Google trial, mock-ups for the 2006 vision of the Google Phone were introduced into evidence.

Not an iPhone

Google intended to release a BlackBerry-like device that eschewed a touch interfaced in favor of soft keys. So they were planning to knock off the most popular phone at the time – until a better one was announced in 2007. So what did the first Android shartphone, the HTC Dream/T-Mobile G1, look like?

Nothing like the iPhone

Now the Dream also had a slide-out keyboard and hardware keys, but there’s the handy home screen icon layout and touch interface. Imagine that. Subsequent versions of Android are even more derivative of the iPhone. Although Creepy King Eric Schmidt says “Most people would agree that Google is a great innovator, and I would also point out that the Android efforts started before the iPhone efforts.”, it’s pretty clear now, even more so than before, that Schmidt is a disingenuous shit. You need only watch 10 seconds of Senate subcommittee testimony to know that anything hanging out of that guy’s mouth hole is bullshit.

So Apple has an additional little something for its back pocket should it decide to ever go after Google itself. Thanks for the bullets, Mountain View. Not that Apple needs them.

Apr 112012

True to their alleged word, the U.S. Department of Justice filed a lawsuit against Apple and five book publishers “for conspiring to increase the prices that consumers pay for e-books.” Three of the publishers, Hachette, HarperCollins and Simon & Schuster, have already agreed to a proposed settlement, which I imagine puts some nasty writing on the wall for the other two hold-outs (Macmillan and Penguin). But how does Apple fit into all this? Earlier today at the E-books Press Conference, where the lawsuit was announced, Attorney General Eric Holder attempted to set the stage:

Beginning in the summer of 2009, we allege that executives at the highest levels of the companies included in today’s lawsuit – concerned that e-book sellers had reduced prices – worked together to eliminate competition among stores selling e-books, ultimately increasing prices for consumers.   As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles.

During regular, near-quarterly meetings, we allege that publishing company executives discussed confidential business and competitive matters – including Amazon’s e-book retailing practices – as part of a conspiracy to raise, fix, and stabilize retail prices.   In addition, we allege that these publishers agreed to impose a new model which would enable them to seize pricing authority from bookstores; that they entered into agreements to pay Apple a 30 percent commission on books sold through its iBookstore; and that they promised – through contracts including most-favored-nation provisions – that no other e-book retailer would set a lower price.   Our investigation even revealed that one CEO allegedly went so far as to encourage an e-book retailer to punish another publisher for not engaging in these illegal practices.

So publishers allegedly met regularly with the intent of fixing e-book prices. Whatever figure the publishers allegedly agreed to, Apple would receive a 30% “commission” to host the content in its iBookstore. Coincidently, this same 30% is what Apple charges developers to host apps in its App Store. And what Apple takes for facilitating in-app purchases. It’s not a “commission”; it’s the cost for Apple to host, market and facilitate the monetary transactions for e-book content provided by publishers. Whatever price is set, however it is set, Apple gets 30%. How does this make them a party to price-fixing again?

It stands to reason that the three stooges that buckled under the DoJ will force the other two publishers to settle as well. But Apple? Notsomuch. You may have heard that Apple is a company that doesn’t mind digging its heels in when it feels like its being slighted. I think being painted as a price-fixer would fall pretty neatly into that category. 1997 Apple might be content to take it in the shorts from the government; 2012 Apple will feel no such compunction. I hope Mr. Holder has clean laundry in his drawers and has stockpiled ample foodstuff, cuz there’s a siege a comin’.

Mar 092012

I have a love/hate relationship with the DoJ. I love them when they go after Google like when they did with the whole “Canadian prescription drug” thing. Good times. But now they’re allegedly going after Apple. Thankfully, it doesn’t matter if we’re talking about knock-off Android OEMs or the U.S. Government, Apple isn’t backing down in its stance regarding any iBooks-related price-fixing.

The skivvy knot is over Apple’s role in allegedly conspiring with publishers to fix the price of e-books and the evidence against Apple is pretty damning. And by “damning” I mean “anecdotal and circumstantial”. Exhibit A: Prices of e-books went up after the introduction of the iPad and its iBooks, even though Steve Jobs was quoted by Walt Mossberg that the Amazon competitor’s offerings would “cost the same”. Exhibit B: Apple would not let publishers offer an e-book for less on a competitor’s platform. Exhibit C:…

/shuffles through imaginary papers

//imagines this is the part of the Matlock episode where a judge would let Matlock fish around for 10 minutes speculating while the witness and counsel for the defense sat mute

I guess that’s it. It’s likely that the DoJ is just saber-rattling and holding back information before taking more formal action. They may want to consider releasing something that resembles actual evidence of price fixing before they go to trial, unless of course they want to come off as bigger idiots than the guy who writes the TSA’s blog. In a separate court matter dealing with the same theme, Apple released some statements relating to a currently-filed class action lawsuit. Quotes taken from The Verge:

“Guilt by association” and sinister interpretations of Apple’s public statements (Jobs’s quote to Mossberg re: iBooks “costing the same”) do not make up for basic deficiencies in Plaintiffs’ conspiracy theory. The facts depict unilateral – not conspiratorial – action by Apple. Before Apple entered the eBook market, one competitor, Amazon, the nation’s largest bookseller, had taken 90% of the market by pricing key eBooks below their wholesale cost. Having no desire to incur the losses that would flow from retailing in such an environment, Apple individually negotiated separate vertical agreements with each of the Publishers to serve as a distribution agent in exchange for a 30% commission on eBook sales. Each Publisher set its own prices – and Apple “exercise[d] no discretion” over prices but to ensure that Apple’s iBookstore would not be undercut by other sellers and that these offerings would be attractive to consumers, Apple negotiated general limits to the prices set by the Publishers, requiring that the Publishers match lower prices on key titles offered elsewhere. These were competitive, not conspiratorial, actions.

Did that man from Apple say that Amazon had 90% of the e-book market?

/hears no saber-rattling

Apple is stating that they had no desire to compete with Amazon’s pricing model by taking a loss, so they told publishers to set their prices and Apple would take 30% of whatever each of them decided – individually. That 30% is a pretty damningly round number, however. Regarding the allegations that Apple was using iBookstore agreements as a way to hinder Amazon’s entry into the tablet market:

…if Amazon was a “threat” that needed to be squelched by means of an illegal conspiracy, why would Apple offer Amazon’s Kindle app on the iPad? Why would Apple conclude that conspiring to force Amazon to no longer lose money on eBooks would cripple Amazon’s competitive fortunes? And why would Apple perceive the need for an illegal solution to the “Kindle threat” when it had an obvious and lawful one which it implemented – namely, introducing a multipurpose device [the iPad] whose marketing and sales success was not centered on eBook sales?

I would have also added “The necessity of Amazon having to use the Android operating system was a far more effective “self-squelching” strategy than anything Apple could have done.”, but I’m not a lawyer.

If this is the kind of hard line that Apple will take with the DoJ – and if you’ve been following any of the Android OEM litigation, I hear they can be real dicks – I don’t see an easy $500 million payoff in their future.

Feb 232012

Well that didn’t take long. Scrappy upstart Proview sure talked a good game, but when it came time to enter the ring in Shanghai with an iPad injunction on the line, we all knew what was going to happen.

Owned: Chinese government edition

Of course, Proview insists that this isn’t the end of the story, as the reason given for the denial of the injunction is that Apple’s appeal of the original Guangdong provincial high court decision – the one that got the iPad pulled in some Chinese cities – is pending. Staring down the barrel of bankruptcy, Proview is now willing to settle for a mere $400 million for the iPad trademark, as opposed to the reported $3 billion they were originally seeking. By the time the company’s creditors pull the plug on this fiasco, I have a feeling they’ll settle for a couple of Apple t-shirts.

Feb 162012

I’m a big fan of Kirby Ferguson’s “Everything is a Remix” video series, which explores how the evolution of different types  of media is actually pretty incestuous. The premise of the series is something that appeals greatly to common sense: most everything that we come to enjoy is derived, repackaged or otherwise morphed from one or more ideas that came before it. If you listen to anything on the radio nowadays or look at what’s playing at your local multiplex, you’re quickly made aware, to a nauseating degree, how little original content exists. Original ideas are hard to come by, and even harder to transform into anything of value. One could argue that in today’s society, no idea is truly original at all.

The first three installments of Ferguson’s series were hard not to like because they didn’t judge the act of taking or “borrowing” from ancestral work to make something new and sometimes better. I got a chuckle seeing all of the ways Quintin Tarantino pulled from dozens of classic films to create his work, right down to the camera angles. It seems that this unfettered sourcing of prior work could do nothing but add to the value of the original, except in the case of remakes like “The Last House on the Left”, which was horrible by any account.

The fourth (and perhaps last) installment, however, moves from the world where everyone benefits from artistic borrowing and focuses on the evolution of the system designed to protect the rights of the developer: the concept of intellectual property. He begins by pointing out that life on earth began as a single-celled organism that over billions of years spawned every living thing. By all accounts, that turned out pretty well. This used to be the case with ideas, but through a series of acts designed to make the act of creation more valuable than the act of copying, the ability to borrow has become compromised to such an extent that it’s hindering our progress. I agree with this generally, but Ferguson gets a little loose with some of the details. You probably won’t be surprised to read that the exception I take involves how Apple is depicted as using intellectual property, which he bundles together with the acts of patent trolls like Paul Allen, who uses a “suing to make a buck” philosophy to line his pockets while stymieing innovation.

He opens, as anyone who would want to lump Apple together with patent trolls, with Steve Jobs’s statement that “great artists steal”, then leaping to the Jobs quote that appeared in the Isaacson biography of Jobs wanting to go thermonuclear on Android because it was a stolen product, as if these are diametrically opposed viewpoints. I submit that the types of things “stolen” by Apple do not resemble those things “stolen” by Google. Jobs took the embryonic ideas from his (paid) tour of Xerox’s PARC research and rendered the first true consumer GUI. Google took an established, extremely successful product and swiped significant components of what made it a successful in the market. Unfortunately for Google, Apple had already been burned on the intellectual property playing field and worked meticulously to patent the parts of the iPhone (and later iPad) it felt were original. The inspiration and subsequent iteration of PARC’s ideas by Apple did not happen the same way that Google took from the iPhone, which leads me to my counterpoint: let’s look at a famous example of what happens if one cannot protect their innovations.

The history of Apple’s beef with Microsoft over the “look and feel” of the Macintosh OS is well-documented. Apple commercialized the modern desktop metaphor and Microsoft brought a very similar product to market. Apple unknowingly allowed Microsoft the legal right to do it, and I would argue that this turn of events, combined with Microsoft’s decision to license its OS to several manufacturers, led to its ascent and eventual dominance in personal computing at the expense of Apple. This inability to leverage any intellectual property framework to protect its investment almost led to the company’s demise. This is a case of the best product being pushed to the verge of obsolescence in part because they couldn’t protect their invention. Once taking back the reins at Apple, Jobs was able to radically innovate again, this time making a point to protect the company’s ideas to the greatest degree possible. His motivation was not to land lucrative licensing agreements with imitators, but to do what intellectual property was intended to do: protect the investments of the creators from hacks looking for shortcuts to success.

You can argue that intellectual property is the devil, but the fact of the matter is that its a tool. Paul Allen wants to use it to squeeze money out of its loosest interpretation without having an actual product in the real world to represent it; Apple wants to protect the stuff it makes. The “social evolution” that Ferguson speaks of in the final installment of “Everything is a Remix” is a nice concept, and the current state of intellectual property-based assaults by some parties makes the idea even more intriguing, but at its core, in a world where companies spend billions to bring their products to market and stand to lose that and more if those products are allowed to be “slavishly copied”, it’s a much more romantic than practical one. The absence of innovation protection can be as bad as its abuse.

Feb 152012

Proview Shenzen is a company that is financially one clockwise revolution away from the sewer pipe. Its only asset is a name, a name for which Apple has a licensing agreement with the company in 10 different countries, including one with China under a Taiwanese affiliate. Proview claims that the agreement is not valid, and at least for now some judge in China agrees. Proview is lobbying the Chinese government for Apple to either pay them off or use the infringement on their trademark to not only block the flow of iPads into China, but also block their export from the assembly facilities that Apple (and no one else) so famously utilizes in-country. Proview’s claims have allegedly prompted Apple to pull the iPad from some Chinese retailers, such as Amazon (this is according to a spokesperson from Amazon, a company that in no way competes with Apple and would totally not have a reason to pull it off their site prior to Apple asking). For something that I guarantee will turn out to be a non-issue, variations of this story have been popping up in blogs everywhere for the last month. But that’s the core truth of what constitutes 99.9% of Apple “news”: bullshit that is guaranteed to blow over repackaged in semi-titillating headlines. Let me give you a sense of what’s going on in China regarding Proview, ripped from the pages of my latest screenplay titled “Make Linkbait Hay While the Media Sun Shines, You No-Value-Added Little Bitches” (it’s a working title):

(phone rings)

Chinese government: “Hello, Chinese government”

Tim Cook: “China? Oh, I’m sorry, I thought this was Brazil”

CG: “No, China here. Who is this?”

TC: “It’s Tim Cook over at Apple. Listen, I’m sorry, I meant to call Brazil. I’ve got a shitload of business to discuss with them…”

CG: “Business?”

TC: “Yea, boring stuff, really. I guess they don’t have as many bankrupt assclowns wanting to fuck with our supply chain or cash in on moo shu wrapper-thin IP. That reminds me – I have to catch up with you later to talk about demobilization phasing. Anyway, gotta go!”



Jan 132012

I confess I haven’t been following the whole Google, Search Plus Your World debacle, aside of muttering to myself “catchy name”. What I’ve picked up from my RSS feed is that Google has gone and flipped another one of those damn switches, and this one folds information from Google+ into your search results. This ostensibly ranks some results that favor Google and its services over results that, say, would give you the most relevant information.

Even though I’ve been turning a deaf ear to the latest exploit of Google’s search monopoly, according to Bloomberg, the FTC hasn’t. They plan on broadening their current antitrust investigation, which Google made public in June, to include Google S,PYW. Who says there’s no efficiency in government? Put your hand down.

I really hope all that talk about Eric Schmidt going into politics was just that. This guys appears at 2 Senate Subcommittee meetings chanting “Google doesn’t play favorites with search” over and over and now Google+ makes it 100 times more obvious than any of the algorithmic games that were being played before. At least then you needed smart people to root out their bullshit. This rises to a level of bluntness that even elected officials will be able to act on. Do Larry and Sergey secretly hate Schmidt? Maybe this is their idea of a practical joke?

You can bet that this piling on is going to yield some kind of blowback for Mountain View (in addition to the supernova of Schmidt’s political future), and it won’t be the kind of trouble that Larry will be able to buy his way out of.

Oct 142011

Poor Samsung. Can’t a guy knock off a few patented features of a competitor’s product anymore? Remember the salad years? Windows 3.1? Those were the days! Now they’ve got these CEOs who refuse to license their stuff and these bands of lawyers to back them up! And to make matters worse, the courts are backing them up!

This week has been particularly miserable for Sammy. Not only has the parade of preliminary injunctions grown to include Australia (in addition to Germany and the Netherlands), a federal judge in California opined that Samsung does infringe on some of Apple’s patents in the U.S. and a Dutch court ruled that Samsung couldn’t use FRAND patents to force an injunction against Apple’s products. Rough week.

“You keep him here!”

Apple doesn’t want to charge you a licensing fee, nor do they want to cross-license your bullshit, bought-from-another-company patents. Apple wants you to stop knocking off their innovation, even if your execution has been laughable. And they’ll go to the mat – and the courts – to shut you down. Maybe now they have your attention.

Sep 232011

Samsung’s really, really mad and they’re not going to take it anymore! According to an Associated Press interview with Lee Younghee, Samsung’s head of global marketing for mobile communications, the Korean manufacturer that has had its product banned for infringing on Apple’s intellectual property in Germany has transitioned from Road House Dalton’s “being nice” into full-on “not being nice”. Let the throat-ripping begin!

“We’ve been quite respectful and also passive in a way” Lee said, out of respect for the vast volume of business it does manufacturing components for several Apple devices. “However, we shouldn’t be … anymore.” All it took was Apple asserting and a German judge confirming that your Galaxy Tab 10.1 was so derivative that it was banned from being sold. Lee then claimed that it would take action against Apple as a “free rider” on patents that they had let Apple infringe all over before now – no doubt out of the goodness of their hearts. Way to defend your IP.

I’m sure Samsung’s investors are as excited by the current non-specific threats being offered as they were about how systematically you’ve presented your ass for mounting by Apple up until now. That’s what you get for borrowing ideas from “generic patents” and by being so respectful when Apple pursued its legal options. Is there not a shred of decency in business anymore?

Compounding the hilarity is this passage in the article:

Lee joined Samsung in 2007 from French cosmetics maker L’Oreal. Makeup and mobile phones have a lot in common, she said, in that both are focused on individual expression.

I guess if you’re going to put lipstick on a pig, you may as well bring in an expert.

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