Tim Cook Prefers Settling To Suing and Has a Huge Quarter

An anonymous reader writes "Apple's current legal battles with Samsung encapsulate a large number of patents, innumerable suits and counter-suits, and have resulted in legal motions in 11 jurisdictions across the globe. As you may remember, Steve Jobs in his biography was quite vocal about his intent to go thermonuclear on Android, vowing to spend every last dime in Apple's coffers to destroy Google's mobile OS. But Tim Cook is a bit more level headed about things, expressing during Apple's earnings conference call yesterday that he has has always hated litigation and would much rather settle than to battle in court. The caveat, of course, is that Cook doesn't want Apple to 'become the developer for the world.'" It may not be what Jobs would do, but as zacharye notes, it doesn't seem to be hurting earnings. "Despite early-morning jitters on Wall Street, Apple on Tuesday reported yet another blow-out quarter. The Cupertino, California-based company managed the second most profitable quarter in its history, posting a net profit of $11.6 billion on $39.2 billion in sales. Apple sold 35.1 million iPhones into channels last quarter, along with 11.8 million iPads, 7.7 million iPods and 4 million Mac computers. While the firm continues to dominate the technology industry — Apple is currently the most valuable company in the world — several analysts think Apple is just getting started."

Comments

Developer for the world?

[serviscope_minor]

Developer for the world sounds like a bit of a tall claim.

Apple really don't invent much new stuff. What they are excellent at is combining existing, often poorly implemented, inventions into very well polished consumer products. That's their business and they're very good at it.

But, it shouldn't be subject to patent protection, and their patents tend to be dubious at best.

The other thing is that patents or not, it's an extremely hard thing to copy.

Re:Developer for the world?

[gstoddart]

But, it shouldn't be subject to patent protection, and their patents tend to be dubious at best.

Unfortunately, this is the situation we find ourselves in. Everything is patented, no matter how absurd, and companies are basically performing rent-seeking by suing everyone who makes something resembling one of their "existing, often poorly implemented, inventions" (which as often as not are just copies of other ideas which have been around a while).

The problem is the absurdity of the patent system, much more so than any of the players. They're all playing the same game, and nobody wins in the end except for the big companies.

How much is Microsoft making off every Android phone again?

I don't see how any company could possibly not be getting embroiled in this unless you simply roll over and cough up a percentage of your earnings to any schmuck who comes along and says he's got a patent.

Re:Developer for the world?

[jedidiah]

They don't invent things that deserve a 20 year monopoly and a legal right to run everyone else out of business.

Re:Developer for the world?

[jedidiah]

> but finding the algorithm to know when its a real finger and not accidentally touching is patent able.

disputable

> no one is stopping samsung and others from doing the same thing to find their own algorithm

Chances are, they already have. It's just the Apple now "owns" the approach regardless of how it was derived. It doesn't matter if I read it in the patent, or if I was able to "re-invent" it myself.

The patent was likely never consulted because of the whole "treble damages" problem. So it is likely that the patent is competely worthless and unecessary.

Your perverse idea of how patents should work allows the first person to file to steal the intellectual work from the rest of the market.

Re:Developer for the world?

[MikeMo]

Ya know, maybe they don't "invent" things. Whatever. One can say for sure that most of the industry tends to copy Apple's, er, um, 'not inventions'. What did smartphones look like before the iPhone? What did tablets look like before the iPad? Aren't all of the ultra books attempted copies of the Macbook Air? For sure, Intel uses the Air as the target .

The point is, whatever you want to call it, Apple does seem to lead the industry (at least recently) and they probably do get a bit tired of seeing everyone make stuff that looks and feels like theirs.

Re:Developer for the world?

[Baloroth]

You mean before and after the LG Prada, right? Which came out before the iPhone and was the first phone ever with a capacitive touchscreen.

Re:Developer for the world?

[Anonymous Coward]

Quite a few things new ways of looking at the world come directly from Apple, or employees they have hired and bought their inventions when no one else was looking at them -- not willing to foster these ideas into something tangible.

And most of the stuff Apple has been complaining about have been things that could have been found by others, but weren't. Or complaining that someone takes a surface level idea and tries to ride the coattails of something much more popular to the point if they didn't sue, it would encourage others to create identical devices without having to put the hours in.

I mean, with touch tablets...we all talk about how there really is only one form factor and that others are simply doing what they would have eventually done anyways, reducing the device to solely what was there. And if this is the case, why did every single tablet that came out before look pretty fucking shitty and now all want to try to look like the iPad. Wasn't like it was the first...yet, they took the time to do it right.

As for other patents...I've had two patents in my name over the years (currently my university is fighting to take my name off because I refuse to 'monetize' them). And everyone in my field has come out and publicly shouted that what I did was OBVIOUS to everyone in the field. And it kinda was. Using time tested techniques and putting it together in a unique way that no one else had. Others had worked for 40 years in the field and got angry that these were patentable...the only reason I even agreed to patent it was that I didn't want to get sued by someone else in the future (and sadly, my employer technically has a suit against me now). And yet, they couldn't put two simple concepts together and make it work because everyone was fighting over the fact that they believed in one or the other concept and never thought to work together (both of which long since past the patent...and it WAS a little more than just adding the two together, but once you did and saw the results, you realized you could achieve far more going down this path than anything else).

So yeah, when Apple combines existing inventions and actually makes them work when others that have had a lot more time and budget (at least 5 years ago)...they have done something that no one else could have done. And more to the point, they had the expertise to figure out what was important, and what isn't important. You really don't know a subject until you can make it useful to someone that isn't an expert in the field.

Re:Developer for the world?

[serviscope_minor]

you can patent implementation, not the idea

No, patents protect the idea, copyrights protect implementations.

car companies have all kinds of engine patents yet there are something like 10 different car companies selling cars in the US that all take the same gasoline

The basic idea you are referring to is the Otto cycle and it was indeed patented. The patent has long since expired.

if someone comes out with an idea you can always find a better way with some time and effort.

No, you can't, especially when patents are simply too broad. If someone patents the idea of multitouch on a phone, there is no way of implementing multitouch interfaces on a phone without violating the patent, no amtter how much research you do.

its always the asian companies that only want to rip off someone's work just to sell it for less.

Whereas, American companies want to rip it off, sell it for more, then sue the inventor?

Re:Developer for the world?

[serviscope_minor]

Ya know, maybe they don't "invent" things. Whatever.

Yes.

One can say for sure that most of the industry tends to copy Apple's, er, um, 'not inventions'.

Designs. The word you are looking for is designs.

What did smartphones look like before the iPhone?

Well, in 1992, you had the IBM Simon which was a blank slab with nothing but a touchscreen. Due to the manufacturing tech and other constraints of the time, it was quite thick and a bit lumpy, because the basic aerial and speaker tech was not advanced. But bsaically, it's a cuboid with a screen and nothing else.

Then, later you had the LG Prada which was basically the same idea with 2006 era manufacturing and phone tech. That makes it a rather slicker cuboid with a screen and little else.

So yes, Apple didn't invent the idea or basic design, but they produced a very refined version of it.

What did tablets look like before the iPad?

Er, pretty featureless cuboids with little else but a screen and as thin as possible given the state-of-the art manufacturing tech, like the Hp-Compaq TC1100?

Aren't all of the ultra books attempted copies of the Macbook Air?

Again, they were not the first company to make thin or light laptops.

You're again confusing inventing the original idea with producing a good or even leading implementation of the idea. The latter is what Apple do, not the former. There's nothing wrong with that.

Re:Developer for the world?

[dyingtolive]

That's not the point Baloroth was trying to make. The claim was presented that there was no phone that looked like the iPhone prior to the iPhone coming out. That is false.

All your argument suggests is that Apple is better at advertising and marketing.

Re:Developer for the world?

[betterunixthanunix]

Except that mathematics was never supposed to be patentable, regardless of how hard someone worked on it.

Re:Developer for the world?

[morgauxo]

First, an algorithm is simply a series of steps that accomplish a goal. That series of steps would have accomplished the same goal before it was ever patented. Nothing new was brought into the world just because somebody thought of the algorithm and then patented it. Also, in most cases lately somebody already DID think of it, they just didn't do it in a mobile device, or on the internet or blah blah blah

Second, for any goal, including your example there are probably only a finite number of possible algorithms to achieve the goal. This certainly can prevent others from doing the same. Even if there are many ways of doing something there is usually only one best way and occasional a few best ways.

As a consumer, when company X has the patent on the best algorithm to do A, company Y has the one for doing B and company Z for C then whose device do I buy? Either they are all overpriced due to money spent fighting in court, paying settlements and licensing fees or they all suck because each is only good at either A, B or C when what I want it for is D, the combination of A, B and C.

Re:Developer for the world?

[Zordak]

No, patents protect the idea, copyrights protect implementations.

No, Copyrights protect "original works of authorship fixed in any tangible medium of expression." (17 U.S.C. 102). Patents protect new, nonobvious, and useful "process[es], machine[s], manufacture[s], [and] composition[s] of matter." (35 U.S.C. 101). Neither protects "wouldn't it be cool if ..."

I can tell you from firsthand experience that patent examiners frown on merely claiming a desired result. If your patent claim is "I claim a cloaking device capable of preventing visible detection of an object," the examiner will usually reject the claim for lack of specificity, even if you've fully disclosed a fully-enabled embodiment of a cloaking device. Of course, your attorney may be clever enough to draft claims broad enough to cover every method of implementing a cloaking device that people are able to come up with for the next 20 years, but if anything I would say that is persuasive that you have something truly revolutionary that deserves patent protection.

Re:Developer for the world?

[quacking duck]

The iPhone was released in late June '07 but was *announced/demo'ed* January 9. This is a critical point because it widens your hypothetical reaction time between iPhone and N810 from 3 months to 10. Not saying there was any copying, or that the N810 was a reaction to the iPhone, but with almost a full year after the iPhone was demo'ed, it's harder to claim parallel development with near-100% certainty.

The N810 also had a *resistive* touchscreen, and... well, wasn't a phone but an "internet tablet" that relied on wifi or a Bluetooth bridge.

Meanwhile, the LG KE850, aka Prada was not announced Jan 2007, it was announced Dec 12, 2006, less than a month before the iPhone was demo'd. And if your original point with the N810 was that 3 months wasn't enough time for Nokia to copy Apple, Apple definitely didn't copy LG, with less than a month between both announcements (and over Christmas, too).

I watched various video reviews (example), and LG's own promo video from 2007, and about the only thing similar between the Prada and iPhone is that it has a capacitive touchscreen. The user interface in no way measures up to the original iPhone UI. The Prada at launch didn't have a full keyboard (so T9 only for text entry), and judging from the various apps they basically just transplanted onto a touchscreen the same small-screen, large-text interface seen on phones with a T9 keyboard, with very few UI innovations. Entering contacts was as awkward as I remember when I borrowed a phone in 2005. No multitouch, and what little swiping I saw was for scroll bars, which the reviewer had a very awkward time using, and the responsiveness was jerky (but "good enough", of course).

I tried finding images or video of their internet browser. Instead my top hits included an 8-step guide for setting up its internet connection first. I gave up after reviews said it was hopelessly outdated, and navigation/display options were "very poor". No wonder they never bothered showing it in demos and reviews.

I know this particular thread is about the hardware. I am not the original poster, and I have no problem saying there's parallel development in touchscreen hardware for phones.

But judging by what I see of the first Prada... no way in hell was it Apple's marketing alone that propelled the iPhone to the top, like you're implying.

The Prada got into user's hands before the iPhone by a few months, but its UI carried over far too much baggage and inappropriate interface elements from older phones, so it was completely and rightly eclipsed less than a month after its intro by the iPhone's intro/demo. And unlike Microsoft's infamous vapourware demos, what we saw of the iPhone in Jan 2007, we got that summer.

But he is still arrogant.

[halfEvilTech]

To bad the summory missed the best quote of the conference call

Finally, one analyst dared ask a question about Apple's litigation battles when it comes to patents. "I've always hated litigation and I continue to hate it," Cook said, but "we just want people to invent their own stuff."

He is still an arrogant ass (yes I will probably lose some karma for that one)

Re:But he is still arrogant.

[Gilmoure]

There's no skill in polishing. It's all about holding up a clunky rock and expecting people to beat a path to your door. Making it attractive and comfortable and fun to use is just useless fanboi marketing techniques. No skill involved there. Thats why everyone does that and there's only a couple companies out there that make new stuff.

Re:Hardware vs Data

[jjohnson]

Ah, you've been digging up pundit's predictions from 2002, I see.

Re:Hardware vs Data

[mclaincausey]

Your post doesn't make any sense. You can't accumulate, store, or access data without hardware. Advertising is a different industry than the ones Apple chiefly participates in (iAd being a mere blip on their earnings report). Apple's products are not viewed as commodities by the market, which is why they command huge margins--margins that went up year over year if you bothered to read the earnings report. Apple's products have been copied and copied again and they still maintain premium status in the eyes of the consumer--margins haven't been destroyed and there's no reason to think they will be in the near term.

"Apple Fever"? TMZ Meets Market Analysis!

[eldavojohn]

several analysts think Apple is just getting started

I find this particularly interesting since I would assume that market penetration should be causing their growth to slow -- hell they did worse than they did last quarter which, although still good, is a sign they're slowing somewhat, right? So I looked it up on this BGR blog site and it appears that only one analyst thinks so, Brian White. Can anyone provide several other analysts who thing "Apple is just getting started"?

I also found some of Brian White's quotes to be less than analytical:

“Apple fever rocks on”

and

"Apple fever is spreading like a wildfire around the world and we see no end in sight to this trend"

I hate to engage in character assassination but that really doesn't sound like any of the analyst reports I've ever read. They're usually dry as hell and stick to the numbers. Numbers numbers numbers, usually that's all that matters. Anyone got numbers on market penetration instead of telling me "Apple fever has no end in sight"?

Re:A ray of sanity

[cjhuitt]

I don't want them to let Flash on iDevices. I've refused to install Flash on my development machine at work since before there was an iPhone (well, before the world at large knew about it, anyway), and IMO the web has improved with the reduction of Flash use where it was entirely unnecessary.

The only downside to all this is the ads that used to use Flash (and thus were automatically blocked for me, no effort necessary) are now using other techniques that don't rely on browser plugins.

Re:A ray of sanity

[mikael_j]

The thing with Adobe is that it's by no means all Apple's fault.

One of the core issues was Adobe's creative suite, when they ported it to OS X they used Carbon rather than Cocoa. They knew Carbon wouldn't live forever yet they threw a temper tantrum when Apple started dropping Carbon in favor of the all-Cocoa future. Then they seemed to realize that if they dropped OS X as a platform they'd most likely end up losing customers as others (possibly including Apple themselves) filled the void, apparently they figure out that users of Adobe software on Apple platforms are generally more loyal to Apple than Adobe...

Re:A ray of sanity

[mclaincausey]

Adobe killed mobile Flash last year. Are you expecting Apple to now build their own Flash client implementation for this buggy, insecure, dying technology? Jobs was right about Flash.

Re:Tiring

[ColdWetDog]

Simple really. It's the Golden Rule.

He who has the gold, rules.

Re:Hardware vs Data

[jjohnson]

And what makes you think they'll stop inventing new devices?

As someone involved the tech world in exactly this "data is king" business model, I can tell you from direct experience that there's a hard limit on the value of data, and that's the value placed on it by business consumers. To quote the Calgary Flames marketing department, "we don't give a shit about surveying our customers". And they don't. They know who their customers are, what their demographic profile is, etc. They cared about (and used) our product because it offered another avenue of engagement, which is a separate concern.

Everyone involved in the data side always spins great fantasies about precision marketing and deep knowledge of your customers, without acknowledging that in many cases, deep knowledge isn't even useful or worth paying for because it doesn't increase engagement or conversion rates or redemption ratios. Remember Xmarks, the bookmarks plugin people who thought there'd be tremendous value in having an aggregate-able database of everyone's bookmarks? They built that database, and then ran out of money because no one wanted to do anything with it. They were saved only because someone else saw an opportunity to sell a premium version of their plugin.

I'm not saying data's worthless, by any means. But it's not particularly valuable in and of itself.

Re:despite all the propaganda

[UnknowingFool]

A short look at the numbers shows that their quarter actually sucked. They sold less units in this quarter than they did in the last quarter.

Almost no one compares quarter to quarter results for this simple reason: Apple's Q2 covers Jan - Mar. Q1 covers Oct - Dec (the holiday season). For a consumer electronics company, you'd expect them to have a slight drop off in sales after the holidays.

The opposite quarter-over-quarter was true for the same period in '11.

Where do you get that? Apple's numbers in millions of units:
Q1 2011

1. Computers: 4.13
2. iPhones: 16.24
3. iPads: 7.33
4. iPods: 19.45

Q2 2011:

1. Computers: 3.76
2. iPhones: 18.65
3. iPads: 4.69
4. iPods: 9.02

Q1 2012

1. Computers: 5.2
2. iPhones: 37.04
3. iPads: 15.43
4. iPods: 15.4

Q2 2012

1. Computers: 4
2. iPhones: 35.1
3. iPads: 11.8
4. iPods: 7.7

Except for iPods which are constantly declining they are increasing sales year to year.

Their absolute numbers are higher than they were last year because they entered new markets. But they are already declining in these new markets after being there for only 2 quarters.

I don't understand how you came to this analysis. The iPad was launched in 2009. Every years it sells more and more. The iPhone was launched in 2007. Every year, more are sold.

They have not gained any market share on Android.

So one company with variations of one phone manage to sell more every year with a majority of the profit, yet cannot outsell dozens of companies with hundreds of models but don't make as much profit and you're not impressed. Also same company pretty much has the majority of tablet sales. You're not impressed.

Everyone is trying to compare them to last year because it's something to compare to which shows an increase. But a quarter-over-quarter decrease is a very troubling sign.

No this is not a sign of trouble because your analysis is faulty. Everyone else is doing the analysis correctly. Year to year is the way to do it.

And they haven't quite beat the reduced market estimates. The estimates were that they would sell 13 million iPads. They sold less than 12 million iPads.

Please. Half the analysts have said that Apple was going to release a iPhone mini years ago. An iPad mini, etc. Analysts predictions are always off.

Here's what you don't understand

[koan]

The Apple logo is an apple with a bite out of it, a reference to the Biblical Tree of Knowledge, but who suggested a bite be taken? None other than Satan, clearly Jobs made a deal with the Devil.

That's why Apple is so successful. /snark