Apple Tax My Eye
If you read the WSJ and NYT and a few other sites with paywalled content I won’t link to, you’ll hear about the ‘fear of an Apple tax’. The idea is that, because Apple won the lawsuit, Samsung and others will have to pay Apple to license patents and the cost of your phones will go up.  The anti-Apple angst in this argument  is absurd on it’s face because:
1) Apple pays license fees to Nokia, Motorola, Samsung and countless others who have IP in the wireless telecom business now as part of the price of every chip they buy.
2) Apple pays a “Samsung Tax” now because Apple buys components from Samsung that Samsung makes a tidy profit from selling to Apple. It’s naive and childish to imagine the idea that any product as complex as a smart phone isn’t already ‘taxed’ in a very tangled web. You may say Apple’s IP will be additive but even if it is, it’s just so much noise below much louder signal.
3) The patents in question are not difficult to work around at all, that is unless you want to make product that looks and feels like an iPhone.
Beyond this Apple Tax hogwash is a segment of the internet’s population that wants to make Apple the villain and Google the great ‘Open Source Savior Of Our Freedom’. Â They loathe Apple, they want to make Apple a villain that goes and whines to the courts. They cite history they don’t understand to paint Apple poorly.
Unfortunately the only legitimate thing they can cling to as proof of Apple’s evil is the infamous quote:
“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,†Jobs said. “I’m going to destroy Android, because it’s a stolen product. I’m willing to go thermonuclear war on this.â€
“I don’t want your money. If you offer me $5 billion, I won’t want it. I’ve got plenty of money. I want you to stop using our ideas in Android, that’s all I want.†– Steve Jobs Via Walter Isaacson
Well fine, be mad at Steve for his typical tone. When you’ve been in any kind of meeting where there is a multi-million dollar argument going on and you haven’t heard somebody take that tone, or, the more dangerous one, the quiet calm and subtle one, get back to me.
That quote is what we in the business call… business.
Remember that Apple has been on the receiving end too: ZDNet:Â Nokia likely netted $600 million plus in Apple patent settlement.
A few things these great “Message Board Marauders” should probably know before they step up to paint Apple the big bad wolf in an industry full of sweet warm fuzzy sheep:
– Apple’s ‘look and feel’ lawsuit against MS was because MS agreed to licensing terms with Apple when they launched Excel. Â Excel, for those who don’t know, was a Mac *first* application built with Apple support and (according to Apple) licensing for MS to use some UI functionality) and Apple objected to MS’s taking license (poetic not legal) in MS’s interpretation of the agreements around Excel by using them in Windows. And.. Â before you jump up and down and say “Apple ripped off what they saw at Xerox PARC!” remember, Apple paid for that (in advance, not after getting sued by the way).
– The lawsuit settled in 1997 with the patent cross licensing agreement with Microsoft was not the ‘look and feel’ license suit but another one over QuickTime and Video For Windows sharing some of the same actual code because MS used the same company to support VfW dev as Apple had used for the QuickTime port to Windows.
– Apple did try to negotiate with Samsung before filing suit.
– Samsung countersued trying to use patents that fall into a class many courts have described as “standards essential” and therefore must be licensed under “Fair, Reasonable And Non-Discriminatory” (FRAND) terms. and, in this case, were “exhausted” because Apple had paid for the chips from vendors who had paid already to license Samsung’s patents. In other words, iPhone buyers were already paying a “Samsung Tax”,
You can have all the opinions you like about which company in the shark lagoon of the tech industry  is the poor persecuted underdog worthy of your activist support but make the arguments you use to support your opinion with some awareness not only of the facts but their historical context.
As I might actually agree (and I do) that the US patent system is a disaster in need of reform the intent of the patent system is a good one, a necessary one: Â “if you invent something, you should have a reasonable period of time to make money off your efforts before others can use what you invented without paying you.” or.. as it’s said in the US Constitution: “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;”
Here’s my take on the current state of affairs:
– Samsung nakedly ripped off Apple in several small but important ways and got spanked for it.
– Google bought Android they didn’t ‘innovate it from whole cloth like conquering heros’ and Android is not, in any practical way like Linux or other FOSS because the carriers maintain control of most Android devices in the wild and they do it in cahoots with the Samsungs and HTC’s of the world. Thinking Android protects your rights as a consumer is delusional at best.
– Until Apple managed to cut their deal with ATT for the original iPhone exclusive, phones in the US were positively buried in crap designed to preserve and extend carrier revenue.  Verizon locked out Bluetooth and wire-connected contact syncing direct to the device so you had to use their online service to manage your contacts off the phones on *many* models of phones. They all had horrible and little ‘carrier branding animations’ at phone startup and ugly badging on the phones. They all  set it up so ringtones were things you could only buy from a carrier at absurd pricing. If a phone had any ‘smart’ at all, it was crammed full of bundled ‘crapware’ even less removable than the junk you find on el-cheapo consumer PC’s.
Apple did more for your ‘freedom’ in that deal they cut with ATT than Android ever has.
If you love Google so much, instead of whining on message boards about ‘big bad Apple’ Â think about this; Google could use this situation as an opportunity to fix the Android ecosystem and we’d all win.
How?
Google licenses “Official Android” branding and access to Google’s Android marketplace to phones that meet certain hardware and openness standards including:
– Users can upgrade to new versions of Android from *Google* not at the carrier’s whims.
– Google will indemnify handset makers from lawsuits from Apple and anyone else over the software.
– Google will “badge” phones that meet minimum specs for current and roadmap Android versions so customers know they won’t have a locked down phone with hardware quirks that make Android development both absurdly complex and profitless.
Google then innovates Android away from Apple’s patents or, if you think they can’t manage that, or that Apple’s patents are bull#$%^, Google can sues to invalidate those patents.
If Google did that? Android would get better. Windows Phone would get better. iOS would get better and the carriers would be left to compete on their quality of their service to attract and retain customers instead of thinking they had any business in the content game that kept them wasting money, and crapping up your phones, hoping to cash in on the next ‘flash of cultural lunacy’ that was the ringtone market.
For more from somebody far more ‘in the know’ on this see: Jean-Louis Gassée’s:  The Apple Tax, Part II
And… in the pity for Samsung department, see the previous post below.
