Apple’s patent war with the rest of the smartphone industry clearly has mixed results. According to Bloomberg, Apple could potentially cut its losses and collect as much as a $10 royalty per device if it were to reach settlements with competitors. Apple could also leverage its patents to reach deals with rivals that would allow the company to better control adoption of new technologies and avoid competitors modifying products to workaround patents.
Early victories in Australia saw sales of Samsung’s Galaxy Tab 10.1 banned in October, only to be overturned by another Australian court ruling in November. Similar temporary bans in place by German courts will likely be overturned after Samsung agreed to modify aspects of the tablet’s design infringing on Apple patents.
With Apple suing just about every major smartphone maker in the industry regarding patent infringement, 3LP Advisors’ Kevin Rivette, previously vice president of IP strategy at IBM, said it is in Apple’s best interest to strike settlements to have access and control over their competitor’s technologies.
Speaking to Bloomberg, Rivette described a scenario where Apple allows rivals to adopt Apple patented technologies to essentially squeeze them into a favorable ecosystem that avoids litigation:
“If I’m Apple, I want divided loyalties [from Android licensees]. At this point, it would make more sense for Apple to build an ecosystem that everyone can live in. If you’re going to license, why not go for the big deal where you lock down supply chains, get your technologies broadly adopted and slow down competitors? That is the game.”
Rivette provided a few interesting scenarios. In one, he suggested that Apple drop its court cases with Samsung in exchange for the company agreement to not use Apple technology for a year. He also imagined Tim Cook negotiating better prices on components that Samsung currently provides as one of Apple’s largest component suppliers. He also suggested Apple could agree to not go after the 7-inch tablet market or even allow Samsung to use iTunes:
Apple and Samsung also could agree to focus on different parts of the market. For example, Apple might make iPad-sized devices while agreeing to stay out of the market for smaller devices with 7-inch displays that could compete with Amazon (AMZN).com Inc.’s new Android-based Fire tablet.
If Apple agreed to let Samsung include Apple’s proprietary iTunes software in such a device — an unprecedented and unlikely step, he said — Samsung’s sales would probably increase. That would help slow gains by Amazon, whose push into hardware makes it a threat to Apple. The move also would make Samsung more reliant on Apple, lessening its dependence on Google.
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