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The most interesting latest news on the topic: Apple |
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Apple and Samsung's companies' top executives are meeting in court-ordered settlement talks over patent infringements, but recent rulings against Motorola and HTC may scare Samsung into submission.
What's Happening: Apple CEO Tim Cook and Samsung executive Gee-Sung Choi will meet with Judge Joseph Spero in San Francisco to discuss the patent infringement cases Apple has against Samsung and try to work out a solution. Since the court ordered mediation in April, Samsung execs discussed their willingness to cross-license, which demonstrates the South Korean powerhouse may want to avoid a trial. What's Really Happening: Samsung's Choi may be on his best behavior at the meetings, because Apple's most recent patent infringement case against fellow Android phonemaker HTC ended up getting HTC's lauded handsets banned in the U.S. Some of HTC's phones are now just starting to stream into the U.S. after being held up by the International Trade Commission in customs over patent issues, but the delay likely slowed momentum for HTC's big push into the market. Similarly, Motorola Mobility saw some of its Android handsets banned after losing in a patent battle with Microsoft. Both Motorola and HTC will likely see their bottom lines substantially damaged by the bans, and Samsung may try to avoid a similar fate by trying to reach a compromise. What's Next: Samsung will likely be receptive to some talk of compromise, but will Apple? The company is in an advantageous position, as its aggressive patent stance against Android phone makers is starting to pay off. Apple's robust patent portfolio will help the tech giant attack Samsung, and Apple may use the verdict against HTC to prove that Samsung committed a similar infringement. It may also draw on its patent victories against Samsung in Germany to bolster its place in the U.S. talks. President Obama may still overturn the HTC and Motorola bans, if he decides the prohibition damages competition and hurts the market. If that happens, then the tables may turn, as Samsung could argue banning its phones would similarly stymie competition. The Takeaway: Samsung may defy these predictions and show up to the meetings with a bellicose, devil-may-care attitude, or Apple may act with uncharacteristic mercy towards its rival -- but, with the ITC's willingness to ban handsets for copyright infringement, that scenario is simply not likely. Samsung is Apple's biggest competitor, and though Tim Cook has not vocalized disdain for the South Korean company with the vigor of Steve Jobs, getting Samsung phones banned would be a huge win for Apple. Although Cook is more diplomatic than Jobs, he is likely to take a firm stance bolstered by the precedent-setting bans and wait for Samsung to agree. |
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Apple and HTC's legal battles are heating up again, and the excessive litigation is hurting HTC's strategy to compete while raising questions about patents and the U.S. legal system.
HTC's recent phone models, the HTC One X and Evo 4G LTE, have both been delayed indefinitely in the U.S. due to a patent investigation by U.S. Customs on Apple's behalf, which could devastate the Taiwanese phone maker's U.S. prospects. The patent in question concerns how phone data about a user's contacts appears on-screen. What's Happening: The U.S. District Court of Delaware ordered the decision makers from Apple and HTC in the most recent patent battle to meet to reach a settlement over the issue. Magistrate Judge Sherry R. Fallon will oversee the discussions, which will likely include Apple CEO Tim Cook and top executives at HTC. HTC issued a statement about the hold on its phones and upcoming patent skirmish, pointing out the controversial feature in question "is a small UI experience and HTC will completely remove it from all of our phones soon." To get around the ban, HTC is shipping phone models to the U.S. with custom versions of Android without the contentious feature. At the same time, the One X, which was available through AT&T, is now listed as "out of stock" on its website, and the Evo 4G LTE, which Sprint planned to begin selling on May 18, is subject to an open-ended delay. Both phones received rave reviews, and the delays are likely to anger customers waiting for their handsets. What it Means: HTC staked its fortunes in the U.S. on its new phone models, and if this delay continues, it may severely impact the company's fortunes. Apple sued to keep HTC phones out of stores in the past due to perceived patent violations, and this latest injunction demonstrates the iPhone maker is still willing to take up arms to protect its product, despite being involved in a number of other legal battles, including a significant e-publishing case and meetings with Samsung over similar issues. What It Really Means: The same patent Apple is using to block the One X and Evo 4G LTE saw time in the spotlight earlier when the U.S. International Trade Commission (ITC) ruled HTC had to remove the feature from all of its phones in 2011. HTC knew it had to work around the patent, as the ruling went into effect in April, but its newest models are now under investigation for violating the same patent. This means HTC will have a harder time defending itself against Apple, since the courts already decided the phones legitimately violate Apple's patents, and HTC's initial shipments still had the feature on the phones. What's Next: HTC poured an enormous amount of resources into streamlining its brand and focusing on a limited amount of high-end phones, and the One series bolstered its finances in the U.S. Keeping some of its best-reviewed phones off the market is sure to negatively impact the company's bottom line, which is why the company's decision to go head-to-head with Apple instead of changing its design from the get-go was a risky move. The U.S. District Court of Delaware's decision to force a meeting between HTC and Apple shows the courts do not want a protracted legal battle, and this flare-up may inspire an investigation into the way the U.S handles patent infringements. HTC will continue to sell the unchanged versions of its new phones overseas because the patent rules are different, and the company may be using this incident to point out the problems within U.S. laws. Since the feature in question is a fairly basic smartphone component -- entering in e-mail address and contact information -- Apple's prolonged fight to protect the technology only holds water in the U.S., suggesting the laws are outdated and faulty. The Takeaway: HTC did not steal Siri or swipe unique features from Apple's iOS. It made use of a feature that many believe should be available to all phone users, whether they're carrying an iPhone, Android or something else. This legal battle is akin to what would happen if it was legal for Neil Young to sue Paul McCarthy for using two major chord progressions in a row just because Young used them at one point. But the music industry doesn't work that way, and neither should the tech industry. Apple is taking advantage of laws due for overhaul and stymieing its competition, which hurts both consumers and the industry. |
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The next generation iPhone will have a larger 4-inch display, according to the Wall Street Journal, trending with consumer interest in bigger displays.
The Cupertino, Calif.-based company is ordering larger displays from its Asian suppliers as it prepares to start production on the handset next month. Analysts believe the new iPhone will launch in the fall. A 4-inch display in the next-generation iPhone would be the biggest physical change to Apple's smartphone since it originally launched in 2007. The iPhone has always featured a 3.5-inch screen, but Android manufacturers have continued to push the envelope when it comes to the display size of smartphones. Many smartphones now feature 4.3-inch screens, and others like the Samsung Galaxy Nexus and the upcoming Galaxy S3 sport 4.7-inch displays. Apple doesn't seem interested in increasing the size of the iPhone screen too much and blurring the line between smartphone and tablet. A bump to 4-inches will make the device more formidable at media-related tasks like watching videos and playing games, while still keeping the overall size of the device the same. A move to a 4-inch screen may be an external change, but it could present problems for developers under the hood. Developers created more than 200,000 apps in Apple's App Store to run on a 3.5-inch retina display. Apps on the new iPhone will have to run with black bars until developers issue updates to avoid pixilation. Still, while a 4-inch iPhone could be a bit of a headache for developers, it is a decision that will pay dividends for Apple. Increasing the size of the device's display gives owners of the 4S plenty of reason to upgrade, as well as get some Android users who were holding out for a larger screen to make the switch to an iPhone. As long as there are millions of people buying Apple's new handset, developers won't mind working a bit harder to make sure their apps run well on the device. The difference between 4 and 3.5-inches may seem small, but for Apple, it's very, very big. |
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Apple plans to pay Foxconn half the cost of improving its labor conditions, as the company seeks to help Chinese workers while increasing overall consumer satisfaction.
Foxconn chief Terry Gou, speaking at his company's new headquarters in Shanghai, affirmed Apple's financial commitment to assisting its Chinese iPad and iPhone factories. "We've discovered that this is not a cost. It is a competitive strength," Gou explained of plans to improve Foxconn working conditions. "I believe Apple sees this as a competitive strength along with us, and so we will split the initial costs." Gou did not, however, disclose a specific dollar amount or show exactly where Apple would spend its money. The idea of fair labor practices being a competitive strength for Apple nearly reverses the previous mindset of the Cupertino company, which first largely ignored reports from civil rights advocates and environmentalists about Foxconn's excessive overtime and unsafe working conditions. But both the iPhone maker and its manufacturing partner now realize the negative publicity could tarnish Apple's reputation, as well as acknowledge many consumers care deeply about the provenance of their products' origins. Apple's abundant profits and huge cash chest -- juxtaposed with the persistent image of beleaguered iPad workers laboring in dangerous factories and strenuous conditions -- likely also created a contradictory tension many found difficult to reconcile. Helping to shoulder the costs to address working conditions will likely be a wise investment on Apple's part, not only to help the workers that manufacture and assemble their products, but maintain their company reputation, especially as these issues continue to come under fire. Some workers injured in factory explosions say they never received compensation, for example, while other employees committed a rash of suicides, reportedly in desperation over low wages. In response to these incidents, consumer advocates like Change.org and Beijing's Institute of Public and Environmental Affairs condemned Apple for standing aside while its main supplier mistreated workers and polluted ground water. But starting in February this year, Apple asked the Fair Labor Association to investigate alleged abuses at several Foxconn plants and has worked to address the FLA's concerns since. Cook himself visited a factory in Zhengzhou, promising to actively oversee improvements. As Apple began to show increased interest, even the Chinese government took steps to placate its biggest contractor by vowing to crack down on Foxconn exploitations. In response to these pressures, Foxconn raised wages from 16 to 25 percent as well as reducing the workweek to 48 hours. The company also has plans to hire thousands of new workers and improve employee housing conditions. These measures are just a start, but Apple's recent campaign to improve Foxconn factories may eventually win the company points with its erstwhile detractors, but they come at a cost. Apple warns its planned investment in Foxconn improvements may raise iPad and iPhone prices, which at first seems counterproductive to consumer relations. But buyers are more likely to fork over cash if they can do so with a clean conscience, which consumers may think is worth an extra hundred dollars for the latest Apple gadget. |
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Apple plans to pay Foxconn half the cost of improving its labor conditions, as the company seeks to help Chinese workers while increasing overall consumer satisfaction.
Foxconn chief Terry Gou, speaking at his company's new headquarters in Shanghai, affirmed Apple's financial commitment to assisting its Chinese iPad and iPhone factories. "We've discovered that this is not a cost. It is a competitive strength," Gou explained of plans to improve Foxconn working conditions. "I believe Apple sees this as a competitive strength along with us, and so we will split the initial costs." Gou did not, however, disclose a specific dollar amount or show exactly where Apple would spend its money. The idea of fair labor practices being a competitive strength for Apple nearly reverses the previous mindset of the Cupertino company, which first largely ignored reports from civil rights advocates and environmentalists about Foxconn's excessive overtime and unsafe working conditions. But both the iPhone maker and its manufacturing partner now realize the negative publicity could tarnish Apple's reputation, as well as acknowledge many consumers care deeply about the provenance of their products' origins. Apple's abundant profits and huge cash chest -- juxtaposed with the persistent image of beleaguered iPad workers laboring in dangerous factories and strenuous conditions -- likely also created a contradictory tension many found difficult to reconcile. Helping to shoulder the costs to address working conditions will likely be a wise investment on Apple's part, not only to help the workers that manufacture and assemble their products, but maintain their company reputation, especially as these issues continue to come under fire. Some workers injured in factory explosions say they never received compensation, for example, while other employees committed a rash of suicides, reportedly in desperation over low wages. In response to these incidents, consumer advocates like Change.org and Beijing's Institute of Public and Environmental Affairs condemned Apple for standing aside while its main supplier mistreated workers and polluted ground water. But starting in February this year, Apple asked the Fair Labor Association to investigate alleged abuses at several Foxconn plants and has worked to address the FLA's concerns since. Cook himself visited a factory in Zhengzhou, promising to actively oversee improvements. As Apple began to show increased interest, even the Chinese government took steps to placate its biggest contractor by vowing to crack down on Foxconn exploitations. In response to these pressures, Foxconn raised wages from 16 to 25 percent as well as reducing the workweek to 48 hours. The company also has plans to hire thousands of new workers and improve employee housing conditions. These measures are just a start, but Apple's recent campaign to improve Foxconn factories may eventually win the company points with its erstwhile detractors, but they come at a cost. Apple warns its planned investment in Foxconn improvements may raise iPad and iPhone prices, which at first seems counterproductive to consumer relations. But buyers are more likely to fork over cash if they can do so with a clean conscience, which consumers may think is worth an extra hundred dollars for the latest Apple gadget. |
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Most think the success of e-books, coupled the with the absence of printing costs, means big bucks for publishers, but there is more to the story on why prices of books on the Kindle and iPad are on the rise.
When Amazon first launched the Kindle, publishers maintained the wholesale model it used with traditional book retailers. But the online retailer chose to sell books on the Kindle at a loss to make its new e-reader more appealing to buyers. The strategy eventually worked out for Amazon, but left publishers a product whose price value was greatly diminished. At the time of the original Kindle's launch, best-selling e-books were available for $10, less than half of what most physical retailers were charging. The low price of e-books on the Kindle misled customers to believe that publishers were now able to produce books electronically at a fraction of the cost of a physical copy. However, that is not the case. Whether a publisher publishes a book electronically or digitally it is still responsible for paying the author, editor, copy editor and design team. Compared to these expenses, the cost of actually creating a physical copy of the book is cheap. The cost of converting a book into e-text, for example, can range from 20 cents to 90 cents a page for a simple conversion, according to Sriram Panchanathan, senior vice president for digital solutions at Aptara, to Digital Book World. Larger publishers often hire teams of ten to fifteen people devoted to managing the digital conversion process, while smaller publishers hire two to three managers. Salaries for low-level managers average at $73,000 and can top out at $200,000, since their technology skills are at a premium. The technology costs can be high, but once Apple's iPad emerged and publishers had another vendor to sell books to, an opportunity for a new model emerged. Publishers were able to set the price of the e-book themselves. For every copy sold in the iBooks Store, the publisher took 70 percent of the cost and Apple took the remaining 30. As a result, publishers began selling books in Apple's bookstore at a higher price, and eventually started doing the same thing on the Kindle. This sudden increase in price gave users the perception that publishers were money- hungry, but what these companies were actually doing was trying to restore lost value to their product. The rising price of e-books may cause some readers to revert to buying physical copies of their favorite titles, but publishers are okay with that too. Profit margins for publishers are still better on print books than e-books. Although publishers may have reaped the benefits of increased e-book prices on both ends, that looks as if it will soon come to an end. Apple and publishers now find themselves embroiled in a lawsuit with the Department of Justice over colluding to raise e-book prices. If the DoJ has its way, e-book prices will likely drop, and the value of publishers products will change forever as the industry moves to find a new model. |
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Apple is fighting to keep a deposition of late co-founder Steve Jobs under wraps, as the company attempts to hold on to its trade secrets, and advantage, in the music business.
A collection of musicians wants access to a deposition given by Jobs in 2010, as they fight a new case against the Universal Music Group. Apple says attorneys for the plaintiffs failed to show why the deposition is pertinent to their case, and the company maintains a release of the documents would be competitively damaging. The plaintiffs are also seeking access to a second deposition given by Apple's senior vice president Eddy Cue, along with other documents that contain more information about the company's relationships with record labels. It's unknown whether the information in the depositions actually contains secret strategies that would hurt Apple's prospects in the music business, but it's clear the company does not want the contents revealed to competitors or the public. The judge in the original case cleared the courtroom of everyone but the jury when Job's deposition played, and Apple points to this fact as evidence to support its position that the documents should stay private. Apple's desire to keep Job's deposition from coming to light stems from its belief that his statements contain "highly confidential and proprietary trade secrets." The iPod maker has worked hard for over a decade forging delicate relationships with music labels and record companies to build its iTunes Store. With the cooperation of major record labels, who had been battling illegal downloading and flailing for a digital music solution of their own, iTunes became the go-to platform for digital music and Apple continues to enjoy a strong, well-established dominance with the help of the record industry. If Job's deposition contains sensitive information about partners in the music industry Apple still has today, a public reveal of those details may damage these crucial relationships. Apple's competitors will be the main beneficiaries if the court rules the plaintiff has the right to get access to Job's deposition. Amazon and a host of other download services have vied with Apple for a stake in the music market, but iTunes is far and away the market leader, though a host of streaming services is now emerging to challenge downloading platforms. If the industry is at another turning point, revealing Apple's strategies may harm the company as offerings like Spotify look to gain ground. Details in the deposition may include financial figures for dealings between Apple and record companies, undisclosed terms of licensing agreements and tactics the company used to outperform competitors in the market. Any and all information may shed light on how Apple has built its lead in the digital music market. A leak of the depositions can't change all that Apple has already done in the music business, but if any of the information in them helps competitors, it may cost the company millions. |
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Apple doesn't just invent new gadgets: the company has perfected a method of avoiding high taxes, saving it billions of of dollars over the years, but opening its business practices up to further scrutiny.
In Brief boils down complex events to give you the heart of the matter -- today and what it means for tomorrow -- clearly and simply. What's Happening: According to a weekend report in the New York Times, Apple locates operations in parts of the U.S. and the world that have lower corporate tax rates, which allows it to keep even more of its profits. Apple is headquartered in Cupertino, Calif., but it collects and invests its profits from a small office in Reno, Nev., which conveniently does not charge corporate taxes. What's Really Happening: If Apple were only operating one outside office, its tax plans probably would not surprise or shock many people. After all, many companies choose to run in locations where their tax dollars would be lower. However, Apple has apparently perfected ways of finding where the lowest tax rates are -- and negotiating its way to sweetheart deals with countries that want to attract Apple's business and factories. Not only that, but Apple's methods of avoiding high taxes are attracting attention from other large tech companies, such as Google, which do most of their business in the U.S. but pay taxes elsewhere at a much-lower rate. For example, the Apple has mastered the "Double Irish With a Dutch Sandwich" method, allowing the company to funnel profits through Irish subsidiaries and the Netherlands and then to the Caribbean. This allows Apple to bypass tax rates not only in the U.S., but in the U.K. and other European countries as well. As a result, Apple allocates about 70 percent of its profits overseas, even though most of its executives, marketers, employees and retail stores are in the U.S. Without the tax dodge, Apple would have paid $2.4 billion more in federal taxes in the U.S. alone last year. The news comes on the heels of negative reports about the work conditions at Apple's Chinese Foxconn plant, leaving Apple to explain how its business practices -- and not always its technology -- may have led to its multi-billion-dollar success. What's Next: Apple says that while it saves tax money by diversifying its operations, it also pays plenty of taxes and "conducts all of its business with the highest of ethical standards, complying with applicable laws and accounting rules." This means that unless governments change their taxing rules, Apple won't change its strategy. However, by keeping its tax money out of the U.S., where most of its customers live, Apple faces a public relations nightmare of being seen as a company that doesn't pay its fair share in taxes. This criticism would be in addition to the negative publicity it already receives for making most of its iPads in China, depriving U.S. workers of jobs to keep Chinese workers employed in what many complain are less-than-optimum conditions. The Takeaway: Apple is taking advantage of loopholes that are available for any company with the ability to put offices in well-researched, low-tax locations, so why should it change? In addition, countries like Ireland, which have already extended billions of dollars in tax incentives to Apple and other tech companies, probably won't withdraw their offers or suddenly raise their tax rates. After all, without such incentives, countries facing severe revenue problems of their own aren't motivated to chase away a major employer like Apple. Countries losing tax revenue often justify the loss by countering they are still able to generate money from the employees Apple and other companies hire. Meanwhile, news of Apple's strategy calls attention to places with lower taxes and can alert even more tech companies looking to save money to follow Apple's lead. In addition, Apple said that while it doesn't pay a lot of tax money, the U.S., U.K. and other countries still make plenty of money from the company because it hires plenty of employees, who spend money where they live -- and higher taxes could make some of those jobs go away, a frightening proposition to job-scarce economies. |
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Apple's next big innovation is happening in television.
The Cupertino, Calif.-based company is negotiating with TV-streaming service Epix, which major movie studios like MGM back. The service has an exclusive agreement with Netflix until next year, but the Apple's talks hint it has plans to beef up the content of its iTV project, and possibly throw a wrench into Netflix's strategy. If Apple manages to steal Epix from Netflix, a deal would boost its content while hurting its competitor. But Netflix is also making deals, and pushing into original programming, to lessen its reliance on one content provider and move beyond streaming into content creation. For Apple, though, streaming deals are just a small part of the challenge. The company current unit streams online content, but a full-fledged smart-TV would take the foray a step further, integrating its sleek hardware with cutting-edge content and programs, likely connected with its iCloud and equipped with Siri and other Apple hallmarks. Rival Google's TV foray failed to generate much buzz, largely due to a lack of content partnerships as well as complaints about the OS and hardware. Apple's current streaming service, though better, is equally lackluster when it comes to content offerings. If Apple can sign up exclusive partnerships, or negotiate distribution deals, much like it does with iTunes and its App Store, the project can be taken to the next level, becoming a portal to buy and connect with iTV units, iPads and iPhones. Revolutionizing television is no easy task, and Apple risks damaging its reputation by failing to deliver a product in line with high consumer expectations. Clinching a deal with Epix at Netflix's expense will help the project, but it does not show the company is making the innovative leaps necessary for success. Apple remains the world's most profitable company, but Samsung is hot on its heels, and to stay number one, the company cannot limit its reach to smartphones and tablets alone. A cutting-edge iTV will stream content, yes, but it must also do it in a way that blows competition out of the water, which may mean providing original programming along with top-shelf hardware and programs. Apple fueled its trajectory to the top with its ability to release unparalleled, unique devices like its crowd-pleasing iPhones and iPads. An iTV delivering an unmatched viewing experience would do just that, and prove the company hasn't lost its flair for invention after the death of Steve Jobs. |
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Sprint (NYSE:S) is seeing its fortunes turn around on the iPhone, but the company's future success lies in its ability to cash in on data services, which is at odds with its unlimited plans. |
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