The HTC lawsuit capped blunt talks that have reportedly shaken their faith in Google
Oppenheimer's Yair Reiner issued a behind-the-scenes report Tuesday that sheds a lot of light on the patent suits Apple (aapl) filed last week against HTC, the Taiwanese smartphone maker.
Citing "industry checks," Reiner writes that:
"Starting in January, Apple launched a series of C-Level discussions with tier-1 handset makers to underscore its growing displeasure at seeing its iPhone-related IP [intellectual property] infringed. The lawsuit filed against HTC thus appears to be Apple's way of putting a public, lawyered-up exclamation point on a series of blunt conversations that have been occurring behind closed doors.
"Our checks also suggest that these warning shots are meaningfully disrupting the development roadmaps for would-be iPhone killers. Rival software and hardware teams are going back to the drawing board to look for work-arounds. Lawyers are redoubling efforts to gauge potential defensive and offensive responses. And strategy teams are working to chart OS strategies that are better hedged."
The story, as Reiner tells it, actually began a year earlier, in January 2009.
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That's when Apple COO Tim Cook, standing in for the ailing Steve Jobs, warned in an earnings call that when it came to companies trying to reproduce the iPhone's user experience,
"we will not stand for having our IP ripped off and we'll use whatever weapons we have at our disposal. I don't know that I can be more clear than that."
That original warning, Reiner says, was read relatively narrowly as referring to Apple's multi-touch technology, and it seemed to have some impact. In the months that followed, the major handset manufacturers -- including LG, Samsung, and Nokia (nok) -- stayed clear of multi-touch. The most prominent exception was the Palm (palm) Pre, which was well received in the press but didn't represent a strategic threat to Apple.
That deference, Reiner writes, began to evaporate in late 2009 with the arrival of two multi-touch smartphones: the Motorola (mot) Droid and the HTC Eris.
"Top-tier handset makers continued to avoid implementing multi-touch, but Apple could safely assume that they were hanging back to gauge Apple's response to Motorola and HTC. If there wasn't one, the OEMs would likely read the silence as a green light, especially after Google also moved to enable multi-touch on its Nexus One phone.
It was likely in order to counter that perception that Apple began reaching out to handset OEMs in January and explaining in no uncertain terms that it was now ready to do battle--and not just on multi-touch. It was ready to press its case along a number of axes that had made the iPhone experience unique, from the interpretation of touch gestures, to object-oriented OS design, to the nuts and bolts of how hardware elements were built and configured."
Why pick on HTC? Reiner speculates that as the earliest and most aggressive user of Android, HTC was the perfect proxy for Apple's real target: Google (goog). It helped that Apple and HTC didn't have any supplier relationships that could be disrupted by a protracted legal battle.
According the Reiner, the combination of tough talk and a high-profile lawsuit have had their intended effect.
"Until recently, most high-end smartphone programs were focused primarily on trying to match the iPhone's user experience, and secondarily on avoiding any egregious violations of Apple's patents.
"We believe this order of priorities has temporarily changed -- along with the industry's appreciation for how far Apple is willing to extend the fight. Few OEMs believe that simply staying clear of multi-touch can, on its own, avert Apple's wrath. We believe a lot of software and hardware is being sent back to engineering departments for work-arounds.
"It's too early to know how Apple's legal action against HTC will ultimately play out, or whether Apple will have the appetite to launch additional battles with other OEMs. But in the near term, Apple's legal actions appear to have temporarily left competitors playing catch-up with their shoelaces tied."
Even before the lawsuit, handset makers were having second thoughts about Google, which with the Nexus One had become a direct competitor. Now their faith in Android as the easiest and cheapest way to counter the iPhone has been shaken, says Reiner. The unintended consequence, he suggests, is to send them into the arms of Microsoft (MSFT) and Win7 Mobile.
"Our checks," writes Reiner, "indicate that Microsoft has been quick to sniff out this burgeoning opportunity and has begun to aggressively promote the strength of its own IP portfolio, as well as its willingness to join battle with customers that come under IP attack."
- Counting patents: Apple, Google, HTC
- Steve Jobs: A man aggrieved
- Apple vs. HTC: What the experts say
- Apple strikes back, sues HTC
[Follow Philip Elmer-DeWitt on Twitter @philiped]