a week in wireless

Wherefore went the August lull?

What an August readers! For a moment there the Informer thought he might have to drag himself off the sun lounger and head back to his desk like all the UK politicians brought scurrying back off hols by the riots. This year’s silly season was marked by so much major activity in the telecoms sector, the likes of which the Informer cannot remember.

The biggest story was Google’s acquisition of Motorola’s devices operation for $12.5bn, which was probably less about Google getting its hands on a hardware manufacturer and more about patent stockpiling as the industry sets about its adoption of the doctrine of Mutual Assured Destruction.

Having been outbid in the recent sell-off of Nortel’s patent portfolio, Google was clearly willing to look elsewhere to build up its arsenal of IP. “We recently explained how companies including Microsoft and Apple are banding together in anti-competitive patent attacks on Android,” said Google CEO Larry Page at the time. “Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies,” he said.

Speaking of which, Apple has been setting the dogs of legal war loose on everyone. With Steve Jobs eyeing the big red button like General Ripper in Dr Strangelove – some grand flourish to end his leadership of Apple perhaps? Yes, it would be amazing if you hadn’t heard, but for those just returning from some far flung holiday destination, Mr Jobs has handed over the reins of Apple to Tim Cook, the firm’s COO, who has been in charge since the beginning of year, and will now take on the CEO mantle full time.

Just prior to Jobs’s departure, it was South Korean vendor Samsung that was on the receiving end of Apple’s legal stick. An Apple-instigated ban on the sale of Samsung’s Galaxy Tab in Europe put in place at the start of August was lifted temporarily mid-month, while authorities investigated the legitimacy of the original ruling. A German court instigated the original EU-wide ban (excluding the Netherlands) on the import and sale of the tablet device, after complaints from Apple that the Galaxy imitated its iPad product.

Apple’s attempt to get Samsung’s Galaxy Tab 10.1 tablet banned from sale could have far reaching impact on the tablet market, with the iPad manufacturer looking to claim ownership of what has become essentially a generic form factor. If Apple succeeds where Samsung is concerned, it might be tempted to go after other competitors.

The suit that has seen Samsung’s ten-inch tablet banned in Germany is focused on the physical appearance of the product, and at the core of the dispute sits a line drawing of an iPad that Apple used to secure a design registration for the format.

According to Colin Fowler, associate at IP specialist law firm Rouse: “This is a serious attempt to get products off the market. Most of the IP war in the mobile space so far has been in relation to patents. Designs have played almost no part at all. But if Apple gets its design registration upheld, then the other vendors are going to have to watch themselves very carefully.”

There’s not a great deal of scope for design innovation when it comes to a ten inch tablet—especially when you consider that elements of the design that have technical constraints, such as the screen, cannot be taken into account. Apple isn’t going after Motorola’s Xoom, for now, but is that product really that different from the Galaxy, or the iPad in appearance?

Furthermore, it is easier to secure a design registration than a technical patent, and design submissions are less rigorously assessed. So Samsung will look to attack the validity of Apple’s original registration. There are other kinds of devices that have a comparable appearance, not least Samsung’s digital photo frames from around 2006, although the company itself has elected to cite prior art with a 30 second clip of Stanley Kubrick’s 1968 film, 2001: A Space Odyssey, in which Dave Bowman views video footage on an iPad-like device.

But if Apple is successful in protecting its physical design (“Dave I know that you and Frank were planning to disconnect me, and I’m afraid that’s something I cannot allow to happen”), competing vendors will have to carefully reassess their product plans. Might RIM be put off introducing a ten-inch version of its Playbook, for example? Will a nine-inch tablet segment emerge in response? Or will the court find that a tablet is a tablet is a tablet? Perhaps in part answer to that question, Samsung this week came out with a device it describes as “a new category of product”. The Galaxy Note has a 5.3” display, putting it somewhere between a smartphone and a tablet and putting the market back into the semantic ridiculousness of netbooks versus powerbooks versus smartbooks etc.

Meanwhile, with so much more time on his hands now, it does not seem beyond the realms of possibility that Jobs will be chasing through the courts, those infringing upon the trademark ‘Steve Jobs wardrobe’. You know, unremarkable black rollneck sweater and unremarkable not-new-not-old jeans and sneakers. Does Jobs’s actual closet look like that of Seth Brundle the Informer wonders?

But if the design registration squabble comes down to the wire, other vendors could perhaps take a leaf out of Roger Waters’s book. When he quit Pink Floyd in 1986 Waters took with him the image rights to the band’s giant trademark flying pigs. Dave Gilmour and the rest simply got around the restrictions by adding a set of giant porcine testicles to their stage props.

Although one tablet that it’s too late to strap the gonads to is HP’s Touchpad, cut down in the prime of its life alongside its smartphone and other webOS-based brothers. During August, HP unexpectedly killed off its poorly performing webOS mobile device unit and announced its exit from the hardware space altogether. Instead the firm will focus on software and services with an eye on cloud computing through the $10bn acquisition of Autonomy, which will no longer be autonomous. Boom boom.

HP chief Leo Apotheker made the announcements during the firm’s quarterly earnings call, candidly admitting that tablets were eating into the PC market and that consumers were not buying HP’s own tablet device – the Touchpad — or its webOS-based smartphone relations.

While another, less obvious market sector falling foul of the iPad’s popularity is somewhat bizarrely, that of personal navigation devices (PNDs). So much so that in order to combat declining sales, TomTom has released an iPad optimised version of its app. Who on earth drives around with an iPad stuck to their windscreen? Does it feed an image of the road traffic to the screen by way of the camera? Is it like some augmented reality experience? The Informer is keen to know.

Another thing the Informer is keen to hear about is Microsoft’s trouble over excessive drinking and sexual harassment. The company is being dragged through the courts in the UK by former UK chief Simon Negus, who was dismissed in 2010 after allegedly getting intimate with a female colleague at a company party and denying the claims when Microsoft began an investigation. A handful of other sexual harassment claims saw him forced to hand back part of a golden hello, while he retorted that his boss “fostered a culture of debauchery” and that “drunkenness and outrageous misbehaviour were rife,” including vodka luges and Jagermeister shots at company parties. Sounds a lot to the Informer like any tech party he attended during the dot com boom years or a Farrelly brothers movie.

A company having a complete sense of humour failure at the moment is AT&T, which might have had its $39bn acquisition of T-Mobile’s US operation torpedoed by the US department of Justice, which this week filed a civil antitrust lawsuit in a bid to block the deal.

The deal was announced in March this year and would see second placed AT&T propelled past market leader Verizon to first place and a share of the US mobile market greater than 40 per cent. The latest figures from Informa’s WCIS Plus service show AT&T with 98.6 million customers and T-Mobile USA with 33.1 million. The combined total of 131.7 million far outstrips Verizon on 106 million customers. But the DoJ claims the move would result in higher prices and lower quality for consumers. “Unless this merger is blocked,” said Sharis Pozen, who heads up the DoJ’s Antitrust Division, “competition and innovation will be reduced and consumers will suffer.”

Ovum chief analyst Jan Dawson, said: “At the very least, this will now create a massive uphill battle for AT&T in consummating its merger, and will create significant delays. At worst, it will prevent the merger from happening entirely, which will result in a massive breakup fee of several billion dollars and various other concessions on the part of AT&T.” Talk about Judge Dredd.

On the subject of moving money, carrier billing has been another hot topic these past few weeks. The Informer recently spoke with Tobin Ireland, Group Commercial Development Director, for the Vodafone Group (interview coming soon) about the roll out of direct operator billing for apps sold through the Android Market, allowing users to charge purchases direct to their phone bill.

Being able to charge Android Market purchases straight to a phone bill or prepay account avoids the user having to enter credit card details. Moreover, billing is often cited as one of the areas where carriers have the upper hand through their relationship with the end users, and can provide value to over the top players.

Telefónica is on a similar mission, having already signed up Boku to establish a carrier billing API for its BlueVia platform, spreading its bets through a secondary deal with PaymentOne. The agreement is limited to the German market, but PaymentOne’s merchant customers can now offer Telefónica Germany subscribers the option to charge services up to €30 directly to their mobile phone bill. The functionality is geared towards one time transactions, recurring subscriptions, in-app billing and web billing.

Wrapping up now, and James Gosling, the creator of the Java programming language, who the Informer once interviewed about ten years ago, has quit Google after only five months at the firm. Gosling joined Google in March of this year, after a long stint at Sun Microsystems and a subsequent falling out with the new owners after it was acquired by Oracle in 2010. But his role at Google was largely undefined, “I don’t know what I’ll be working on. I expect it’ll be a bit of everything,” he said at the time, and he apparently didn’t stick around long enough to find out.

In his new role as chief software architect at a small startup called Liquid Robotics, Gosling will take over the development of the onboard software—sensing, navigation and autonomy—and the company’s datacentre. The firm has a growing fleet of autonomous marine vehicles that rove the ocean collecting data from a variety of onboard sensors and uploading it to the cloud. The robots are connected by satellite uplinks as well as GSM and WiMax communication gear and GPS units.

The robots harvest energy from the waves for propulsion and can stay at sea for a very long time – longer than two years in some cases. They can cross oceans, slowly, but at a great speed for data collection, Gosling said. Sounds pretty cool to the Informer.

So until next week, take care,

The Informer.

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