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Apple Patent Win Puts Carriers in Driver’s Seat

Apple Inc. (Nasdaq: AAPL)'s courtroom victory over Samsung Corp. could also convince the wireless operators to play a more active role in fostering a third mobile operating system ecosystem. (See Jury: Apple Guilty, But Samsung Much Guiltier.)

The U.S. operators have long wanted to see a strong third player emerge to lessen their dependence on only two OSs, Android and iOS. This is something executives from AT&T Inc. (NYSE: T) and Verizon Wireless have stated in the past, even going as far as to defend Samsung in the patent wars. (See Verizon Defends Samsung Against Apple , Nokia's Third Ecosystem Starts With AT&T and CES 2012: It's Time for That Third Ecosystem, Microsoft.)

A trial may not have been the route they had in mind, but the Apple-friendly verdict could cause them to get more vocal in accelerating development of that third ecosystem. Jefferson Wang, wireless practice lead at IBB Consulting, says that Microsoft Corp. (Nasdaq: MSFT)'s Windows OS, and to a lesser extent BlackBerry 's BlackBerry 10, will likely be the beneficiary of the verdict as they're both relatively safe from the threat of Apple litigation.

"[The verdict] gives some of the diversity and decision making back to the carriers and OEMs," Wang says.

The operators have always given the handset makers and software providers requirements for handsets on their networks, but they couldn't force their hands on what to include on devices, Wang adds. Now, they'll likely be stricter about certain requirements and promote more diversity in their line up.

Wang says the new mentality will be, "Don’t just bring your portfolio with rectangular staples and reduce the feature set; do something different." And that goes for all OSes.

Of course, consumers in today's market want rectangular smartphones with big touch screens, so the line between differentiation and building the products that consumers will buy is a fine one. Indeed, that's what got Samsung tied up in litigation in the first place.

What's more, Android is the most popular OS for a number of wireless operators, including Verizon and especially T-Mobile US Inc. . That may not change based on this trial, but in next six to 12 months, Android handset makers may have to look at less eloquent ways of implementing certain technologies to skirt patent issues, Wang says. In the next 12 to 18 months, he says, they'll start looking at new form factors like dual-screens and wireless accessories to stay out of the courtroom.

Nomura Securities analyst Richard Windsor points out that product delays and higher research and development expenses are likely to result for handset makers targeting the U.S., meaning that this process may take even longer than Wang suggests. In the meantime, it's a good window of opportunity for that third ecosystem to begin chipping away at Android's dominance. (See Microsoft Sets a Windows 8 Timeline and RIM Hopes BB10 Roadshow Will Wow Carriers .)

"As Android and Apple tear each other apart, Microsoft has been waiting in the wings and is in a very good position to move in and entice users to switch from Android to Microsoft, as we have already seen that user loyalty is low," Windsor writes in a research note.

While the verdict was delivered Friday, fallout from the trial is far from over. Samsung is working to overturn the verdict and, if that fails, will most likely appeal it. A preliminary hearing on injunctions on Samsung products based on the verdict is scheduled for Sept. 20.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

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sarahthomas1011 12/5/2012 | 5:22:46 PM
re: Apple Patent Win Puts Carriers in Driver’s Seat

It might be easier for the carriers to dicate to Windows-based handset makers what features to include than it was to Android, and certainly Apple, since they're so eager for their marketing and promotion help. The verdict was in good timing with Microsoft and Nokia's Sept. 5 event.

sarahthomas1011 12/5/2012 | 5:22:46 PM
re: Apple Patent Win Puts Carriers in Driver’s Seat

Not surprising, but worth noting, that AT&T, Verizon, Sprint and T-Mobile all had no comments on anything related to the trial. 

DCITDave 12/5/2012 | 5:22:45 PM
re: Apple Patent Win Puts Carriers in Driver’s Seat

If operators do nothing in response to the trial verdict, they'll sell a bajillion iPhones and make a ton of money.


However, if they ACT NOW by promoting device diversity, form factor choices and use their vast developer ecosystems to encourage new OS development, they'll sell a bajillion iPhones and make a ton of money.


It's going to be a very tough choice.


ph

gtchavan 12/5/2012 | 5:22:43 PM
re: Apple Patent Win Puts Carriers in Driver’s Seat By the time thes telco dinosaurs wake up apple and samsung will have settled. Apple supply chain needs Samsung.
bergea 12/5/2012 | 5:22:43 PM
re: Apple Patent Win Puts Carriers in Driver’s Seat

Mobile operators need to take bold steps to benefit from the Apple-Samsung verdict.  Carriers have relied on devices as the interface to innovation, but only Verizon Wireless has taken Android and made it their own 'Droid' brand.  This effort will be set back six-months as the Android community adjusts its development plans to eliminate any possible duplicated features and user interfaces. 


With Apple's victory, now is the time for operators to take the lead by cultivating competitive alternatives.  AT&T and others need to give Microsoft and Nokia a real chance with Lumia and Windows 8. Same thing with RIM’s new BlackBerrys and BB10.  Carriers need to stop driving from the Back Seat!


http://www.lightreading.com/blog.asp?blog_sectionid=1112&doc_id=224232&

joset01 12/5/2012 | 5:22:42 PM
re: Apple Patent Win Puts Carriers in Driver’s Seat

Heh, doesn't Samsung fab the A5 chip for Apple for example?

krishanguru143 12/5/2012 | 5:22:41 PM
re: Apple Patent Win Puts Carriers in Driver’s Seat



Yep, Samsung is an Apple supplier and it is more than just the A5.  Samsung can’t do anything like not sell to Apple as they do have a contract.  Nothing keeps Samsung from raising the prices in future contracts though.  Obviously Apple doesn’t want to leave Samsung otherwise they would have.




krishanguru143 12/5/2012 | 5:22:41 PM
re: Apple Patent Win Puts Carriers in Driver’s Seat



AT&T did give the full backing to Microsoft and Nokia.  AT&T spent more marketing money on the Lumia 900 than any other phone in their history.  AT&T spent between $150 million and $200 million on marketing and they sold 300,000 Lumia 900’s.  Their total marketing budget is $450 million, so at least 1/3 of that was for a single handset.  How is that not giving a “real chance” to WP?  The iPhone was given $101 million.  If we use the low end amount ($150 million), AT&T spent $500 for every Lumia 900 sold in order to sell it.  The ROI was very poor and did hardly anything to increase activations.  That money would have been better off spent elsewhere.  BTW, that $500 didn’t include the subsidy either, so add another $200 to $300 on it.  So AT&T spent $800 per device to move the Lumia 900.  That doesn’t even include the marketing money from Microsoft or Nokia.  WP was never the answer and will never be the answer.  The consumer has voted again and again and it is not for WP.  Microsoft is throwing huge sums of money at WP, care t guess what happens when they stop?  Developers will be leaving as right now, Microsoft is essentially paying them to stay.  So they only develop as it is easy money, when the money dries up, they won’t be sticking around.  A successful ecosystem requires consumers and developers.  The consumers are not there and the developers are paid to be there.

http://www.lightreading.com/blog.asp?doc_id=222897




krishanguru143 12/5/2012 | 5:22:41 PM
re: Apple Patent Win Puts Carriers in Driver’s Seat



“"As Android and Apple tear each other apart, Microsoft has been waiting in the wings and is in a very good position to move in and entice users to switch from Android to Microsoft, as we have already seen that user loyalty is low," Windsor writes in a research note.”

 

It apparently isn’t “low” enough for people to switch to WP.  All the marketing hasn’t really helped their market share at all and the volume hasn’t changed all that much either.  With WP8 coming out and all existing users getting the shaft, the limited customer base they had all got burned in the process.  Why they are even bothering to still sell them right now is beyond me.  Microsoft will recompile the existing apps to work with WP8 and any apps made for WP8 will not run on WP7.  What apps will developers code for?  Yep, WP8.  Also, where is the WP8 SDK?  Yep, not available yet and when are they going to start selling?  Not a way to encourage growth of ecosystem; slash and burn the current users and then don’t provide the tools to the developers for the new platform in a timely fashion.




gtchavan 12/5/2012 | 5:22:39 PM
re: Apple Patent Win Puts Carriers in Driver’s Seat

Let me go a step further, Apple and Samsung boxing match was set up so Samsung would take a dive, in order to set the precedence so Apple could go after Google and Microsoft.   What ever royalty Apple charges Samsung will come out of the Apple supply chain so in effect this is a wash for both parties.

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