Why it’s time for Apple and Samsung to man up and reconcile

by Roger Kay

December 23 2012

Roger L. Kay founded Endpoint Technologies Associates, Inc., an independent technology market intelligence company.


"Anti-trust and monopolistic practices in the high tech industry have been notoriously difficult to regulate," says analyst Roger Kay.

It’s nice to see Samsung and Apple begin the reconciliation process, even if it’s only tentative at this point.

Although indications are that Samsung’s dropping of its quest for an injunction against iPhone sales in Europe was dictated by practical considerations (i.e., it would not get the injunction), the reduction in conflict will be welcomed nonetheless by consumers.

This move follows one earlier this earlier this week in which U.S. District Judge Lucy Koh denied Apple’s request to halt sales of 26 Samsung devices.

Anti-trust and monopolistic practices in the high tech industry have been notoriously difficult to regulate.  The industry and the institutions that it spawns are new and tend to create unprecedented situations that don’t fit well with existing law. In addition, the technology itself and competitive dynamics morph so quickly that the law is always playing catch-up.

Tech companies tend to rail against some presumed monopolistic practice — until they get a hold of the right end of the stick — and then take the opposite stance, protecting their prerogatives with all their might and resources.

Hypocrisy and walled gardens

This institutionalized hypocrisy has tended to lead to a dystopia of walled gardens, which entice buyers in with promises of an integrated experience, but neglect to mention that travel between these gardens will be difficult, if not impossible.

They all do it.  Apple is perhaps the most egregious, jealously guarding its own perimeter in the most arbitrary and capricious way, and even, in the case of pulling Google Maps off the iPhone, going to the extent of cutting off its own nose to spite its face. 

Finger-wagging at Apple’s attempts to stamp all traces of Google out of its domain doesn’t take anything away from Google’s behavior, which is just as bad.  The search giant interweaves its services one with another in an attempt to keep users from ever leaving its platforms.

Apple has tried (and mostly succeeded) in breaking every link to other tech players.  In one notable case, when the industry agreed on a standard some years ago for the interoperation of digital consumer devices (the Digital Living Network Alliance or DLNA), the standards body, which included every company but Apple, agreed on specifications for six layers: connectivity, IP networking, discovery and control, media transport, media formats, and link protection. 

Apple was compliant already on five, but used its own Rendezvous (now renamed Bonjour) instead of UPnP for discovery and control.  The company refused to accept UPnP, even though company officials admitted that there was no technical reason for doing so.

Microsoft and trade secrets

And don’t forget the original bad boy: Microsoft. For years, Microsoft laid mines in its code to blow up other companies’ programs, always professing surprise and innocence when it happened. 

But nobody could tell for sure because no one got to look at the guilty source code, which Microsoft claimed as a trade secret.  By the time the Justice Department forced the company to open its code to select viewers, all the nasty bits had been cleaned out.  Who, us? (whistling)

Apple has chosen a closed system in which it and only it derives nearly all the economic benefit of its technology.  Google has chosen a model that looks more like Microsoft’s: broad licensing to a group of hardware vendors. 

The power of the licensing model is that licensees can deliver a wide range of devices and consumers tend to benefit from the competition, both in variety and price.

Samsung has emerged as the strongest of the Android licensees, but it is only one.  Others include HTC. Amazon, LG Electronics, and others.  Microsoft, still demanding its pound of flesh, has extracted license fees from a number of these companies, claiming infringement by Google on basic patents it owns.

Consumers would really like all this futile litigation to stop.  We would benefit most from a system in which essential patents are licensed on an unrestricted and fair basis.  Companies can compete in the market on the merits of their products.  All these shenanigans do nothing but line lawyers’ pockets at the expense of the public, keep prices high, and reduce choice.

(A version of this column originally appeared in Forbes).
© 2012 Endpoint Technologies Associates, Inc.  All rights reserved.

Roger L. Kay founded Endpoint Technologies Associates, Inc., an independent technology market intelligence company.
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  • eldernorm
    1 year 5 months ago

    GEEEE... "This institutionalized hypocrisy has tended to lead to a dystopia of walled gardens, which entice buyers in with promises of an integrated experience, but neglect to mention that travel between these gardens will be difficult, if not impossible.

    They all do it. Apple is perhaps the most egregious, jealously guarding its own perimeter in the most arbitrary and capricious way, and even, in the case of pulling Google Maps off the iPhone, going to the extent of cutting off its own nose to spite its face. "

    Hate Apple much???

    With Android having 97% of the current malware and being very open, maybe being so open to being able to upload malware is not such a good thing.

    And as far as Samsung and Apple "manning up", I have no idea where you are coming from. Samsung has been stealing Apple ideas since the iPhone start in 2007 and then trying to claim that its standards essential patents are not really FRAND, but just there for Samsung to use. Samsung even got caught paying mucho bloggers to post negative articles like they were truthful.

    Yea, maybe Apple should be more like Dell, you know, sell the company and give the money back to the share holders. Right??

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