As Apple racks up 85 million subscribers to its new iCloud service, beleaguered Motorola sues for patent infringement. To paraphrase Samuel Johnson: “Patent-ism is the last refuge of the scoundrel”. Yes, these days the telecoms industry is a veritable school for scoundrels. Guy Daniels reports.
In the week that Apple produced record financial and performance figures, Motorola turned in another disappointing quarterly report and decided to launch a further patent action against the usurper of its mobile crown.
We’ve already covered Apple’s quarterly highlights and the surge in iOS device sales, but it’s also worth noting that the company’s new iCloud service has got off to a very strong start. Whilst all the attention was on device sales and the iPhone 4S in particular, most overlooked the interest in the cloud service. Whilst there were around 74 million new devices sold in the quarter (phone, tablets, iPods and Macs), CFO Peter Oppenheimer said there were 85 million subscribers to iCloud.
That’s 85 million even with the operational problems that beset the service during its launch last October. Okay, the total also includes MobileMe subscribers who transferred across to the more feature-rich iCloud, and not just those new customers who signed up when they bought a new Apple product. Even so, it’s a strong start for Apple, and further confirmation for the industry (if one was needed) that consumers understand the basic premise of cloud services.
During an investor conference call, CEO Tim Cook said that iCloud is a key component of Apple’s future strategy:
“It was a fundamental shift recognizing that people had numerous devices and they wanted the bulk of their content in the cloud, and easily accessible from all the devices. It’s just not a product. It’s a strategy for the next decade.”
So it comes as no surprise that Apple’s latest popular service would soon become a target of patent and IPR lawsuits. Cue Motorola. A day after Apple released its figures, lawyers for the Illinois-based Motorola popped down to a federal court in sunny Florida to file its suit over alleged infringement of its technology patents. Six patents were cited, and the action was directed at both the iPhone 4S and iCloud.
The patents involve technologies related to wireless antennae, software, data filtering and messaging.
According to the Foss Patents website, the six patents in question have already been cited by Motorola in previous legal actions in Florida against earlier iPhone models. The four patents that iCloud allegedly infringes concern a “multiple pager status synchronization system and method”, a “method and apparatus for communicating summarized data”, a “system for communicating user-selected criteria filter prepared at wireless client to communication server for filtering data transferred from host to said wireless client” and a “method and apparatus in a wireless messaging system for facilitating an exchange of address information”. Full details and links at the Foss website.
As iCloud is so closely engineered to support Apple’s own devices, it is not surprising that the service was added to the list of Apple products that rival patent-holding companies claim infringe their IPR. But what about other cloud services? Do their synchronization, communication and data exchange technologies and methodologies also infringe existing patents? Will Amazon, Microsoft, Dropbox et al also be targeted?
This new filing follows a succession of actions between the two companies since Google announced it wanted to buy Motorola for $12.5 billion. In all, there are some 40 US patents from both sides in dispute. In December, Motorola won a preliminary injunction against Apple, which sought to bar the sale of iPhones and iPad tablets in Germany. In early January, the US International Trade Commission made a preliminary decision in a case brought by Apple against Motorola. The ITC ruled in favour of Motorola in that instance.
If Google manages to complete its purchase of Motorola and gain full control of its patents, anything is possible. For the moment though, Google must be wondering if it has also bought itself a whole heap of operational trouble.
Yesterday, Motorola released its financial result for Q4 and the full fiscal year; they were not good. The company reported a Q4 loss of $80 million on a fairly static revenue base of $3.4bn – contrast that with the $80 million ‘turnaround’ profit it reported in Q4 a year earlier. Full year figures were also disappointing; whilst annual revenue increased slightly from $11.5bn to $13.1bn, net losses fell sharply from $86 million in 2010 to $249 million in 2011.
As for devices, it sold 5.3 million smartphones in Q4, showing the size of the gap between its rivals the iPhone and Samsung Galaxy. Over the whole year, Motorola only managed to sell 18.7 million smartphones and 42.4 million more basic feature phones. Tablets fared even worse; with only 200,000 Xoom and Xyboard tablets sold in the last quarter, and only one million for the whole year (remember, Apple shifted 15 million iPad tablets in Q4 alone). Maybe choosing the laughable ‘Xyboard’ as the brand name for your $530 new device, which, incidentally, failed to ship with Android 4.0, wasn’t such a good idea after all.
Sanjay Jha, chairman and chief executive officer, Motorola Mobility, didn’t have a lot to say: “We remain energized by the proposed merger with Google and continue to focus on creating innovative technologies” was about as good as he could muster.
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