Is Apple still aiming to ‘destroy’ Android and should investors be worried about the strategy?

24th October 2011

In the book by Walter Isaacson which is published today, Jobs suggests he believes that Google's smart phone technology is "grand theft android" as the Daily Mail reports.

It is also clear that as chief executive Jobs acted on the sentiment.

Apple is currently embroiled in a host of law suits worldwide over patent infringements. So far the most successful have been against Samsung, but it is also fighting HTC which is backed by Google.

However, Apple is on the receiving end of law suits too, possibly as a retaliatory legal tactic. And though the two giants haven't clashed directly many believe this is inevitable if the court cases continue, though pundits also think the dispute will be settled eventually.  

However, it didn't sound as if Jobs was in conciliatory mood when he was being interviewed for the book.  It quotes Jobs as saying: "I will spend my last dying breath if I need to, and I will spend every penny of Apple's $40 billion in the bank, to right this wrong. I'm going to destroy Android, because it's a stolen product. I'm willing to go thermonuclear war on this."

It is also clear that Jobs was deeply resentful of former Apple executive Eric Schmidt, who defected to Google and was until recently its chief executive, once again with the Android dispute at its heart.

Here the Economic Times considers Jobs views about various rival executives including Schmidt.

Schmit can give as good as he gets, as this video on Macstories shows, with Schmidt seizing on the fact that Apple's technology is a closed system, which suits Apple, but not necessarily the wider tech economy.

Apple may not, however, be content with its current empire. The Huffington Post's take on the biography concentrates on hints about Apple's new ambitions for, among other things, textbooks and television. "It would be seamlessly synced with all of your devices and with iCloud. It will have the simplest user interface you could imagine. I finally cracked it," the website quotes Jobs saying.

But what is the position of new chief executive Tim Cook? Paid Content considers the issue. It suggests that among other things Cook's style is very different. It notes that patent disputes can drag on for years and represent a huge distraction.

However Cook's most recent quote on the issue is pretty feisty too.

"We spend a lot of time and money and resource on coming up with incredible innovation and we don't like it when someone else takes those," he says.

Google has a very different view as this official Googleblog from its Chief legal officer David Drummond reveals.

He writes: "Android's success has yielded something else: a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents. This anti-competitive strategy is also escalating the cost of patents way beyond what they're really worth. The winning $4.5 billion for Nortel's patent portfolio was nearly five times larger than the pre-auction estimate of $1 billion. Fortunately, the law frowns on the accumulation of dubious patents for anti-competitive means – which means these deals are likely to draw regulatory scrutiny, and this patent bubble will pop."

However, it is also clear that in cases litigated to date, Apple does seem to hold the upper hand. Among other things, Apple's legal action has forced Samsung to remove some of the software from its tablet so it could resume distribution in some key European markets.

However, Paid Content has one warning that might make investors pause for thought.

It writes ""destroying" Android could be a multi-year legal odyssey that is by no means certain. If Google manages to purchase Motorola and its arsenal of mobile patents (which aren't necessarily an ironclad defence themselves, but that's an entirely separate story, Apple could be eventually forced to confront Google and its formidable resources directly rather than suing its partners."

This all begs question are constant patent disputes now simply part and parcel of running a technology business or a dangerous distraction from the important business of innovation?

Here the BBC considers the issue and includes a useful list of just who is suing who. It also quotes some experts who suggest this is actually frustrating innovation.

The BBC quotes Professor Werbach saying: "As long as major companies feel they need to shore up their patent portfolios, we'll continue to see patents valued as defensive assets in a total war, rather than based on their potential for value creation. While in the short run Nortel's creditors and Motorola's shareholders may have benefitted from patent price inflation, the overall impact will be significant market distortion."

In the Observer this weekend, technology writer James Naughton discusses Apple's aggressive stance towards other start ups for example threats made and carried out against Dropbox, which Apple's new
iCloud service challenges.

He writes: "The late Steve Jobs who, in 2009, summoned the young DropBox founder Drew Houston with a view to acquiring Dropbox. Houston declined the overture, saying that he hoped to build a big company rather than be swallowed up by an established behemoth. Whereupon Jobs smiled his sinister smile, opined that Dropbox was "a feature, not a product" and informed him that Apple would be going after Dropbox's market."

Arguably this isn't bad news for investors in Apple though it is very difficult to calculate given the complexity of the legal disputes.  But it might be wise to consider whether other start ups and even some of its biggest rivals are Apple proof.

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