Apple vs. HTC (Android): It’s Not about Money

In the labyrinth of patent language and law it’s almost impossible to predict the outcome of a dispute such as Apple vs. HTC, which is really Apple vs. Android (Google). There’s a ton of discussion and analysis on Techmeme this morning about the case.

Google is not a defendant but you can be sure that Google will be involved behind the scenes and at the PR level. To that end, the company sent TechCrunch — the ultimate tech PR outlet — a statement that it “stands behind” its Android partners:

“We are not a party to this lawsuit. However, we stand behind our Android operating system and the partners who have helped us to develop it”

Google basically dictated the user experience on the Nexus One and HTC built it. The Nexus One comes closest to the iPhone of any of the Android devices to date. So for Apple to sue HTC and not Google is like blaming the car for the accident and not the driver. But Apple is being very purposeful. 

Google probably should be a party to the litigation. However, as a piece in the NY Times points out, the decision not to name Google is part of a legal strategy:

Apple is simply going after a less powerful company first, one with much smaller pockets than Google.

“It clearly involves some form of litigation strategy of picking off the weaker members of the herd first,” Mr Zittrain said. “They can always add Google to the suit later on.”

There are 20 patent claims that Apple asserts against HTC in the case. It’s almost certain that at least some of those claims are valid. It’s possible that the case could settle but the case really isn’t about money; it’s about functionality. 

Apple is suing because it has seen with Droid and the Nexus One that Google and its partners can build devices that come close enough to Apple’s iPhone to take the wind out of its sales. Furthermore, Apple’s decision to stick with AT&T as the exclusive carrier in the US for the time being means millions of potential lost sales at Verizon. Meanwhile Verizon will continue to pound away at AT&T’s network and build the Android brand.

What Apple likely wants is to make Android and all the phones that use it less capable of delivering iPhone-like experiences. If we step back, Apple did in fact reinvent mobile phones, although HTC has had touch screen devices for years. The rest of the industry then came in and basically copied what Apple was doing: touch-screen handsets (no stylus) and app stores. 

My guess is that Apple wants certain types of features or functionality eliminated in future Android phones. It wants the iPhone to remain a relatively unique device in the market so that consumers cannot satisfy their appetite for it through an alternative such as the Nexus One. 

Any judge/jury is going to be unlikely to give Apple everything it seeks because of the fact that there will be a bias toward preserving “open competition” — Google will now likely take it’s Android “open” rhetoric to the next level — and because there are a lot of people who already have these devices. What we’re likely to see then is one of the following scenarios:

  • HTC wins completely (unlikely)
  • The case settles (maybe, depends on concessions HTC would be willing to make; Google is likely to try and prevent settlement [even behind the scenes] where Android is potentially compromised)
  • Apple wins competely (unlikely)
  • Apple wins a partial victory on some but not all claims (the most likely outcome)

As a practical matter the case would take at least a year to get to trial and then, if Apple wins, there would be an appeal. That might mean nothing would change in the near term. There’s also the issue about how the potential for an Apple victory might affect other OEMs. That’s not yet clear.