Saturday, April 5, 2014

Steve Jobs said in 2010 'Holy War' email that iOS was behind Android in several technical respects

I've just seen a Verge article that links to a PDF containing the full text of a Steve Jobs email dated October 24, 2010 to Apple's executive stafff, which is one of the exhibits at the ongoing Apple v. Samsung II trial. The call for a "Holy War with Google" was widely reported before, and while it's a catchy term, it's not explicitly patent-related, unlike "thermonuclear war", "destroy Android", "spend every penny", and "spend my last dying breath". Now that I've seen the complete email I actually think something else is much more meaningful, from a strategic as well as an intellectual property point of view (click on the image to enlarge or read the text below the image):

5. iOS - Scott, Joz

Strategy: catch up to Android where we are behind (notifications, tethering, speech, ...) and leapfrog them (Siri, ...)

I remember that time very well because this was when I bought my first Android device after a decade of using Nokia phones. Tethering (of the WiFi hotspot kind) -- one of the features Steve Jobs mentioned in which Android was ahead of iOS at the time -- was the first important mobile device feature I heard of that Google delivered before Apple. I remember seeing a video of Google's presentation of WiFi tethering, where software developers cheered. I didn't have an immediate need for it, so in my particular case it wasn't a direct driver for demand, but the mere fact that something so fundamental (which I used a lot in the following years, especially on all those trips to Mannheim for countless patent trials) became available on Android first gave me confidence that there was serious R&D going on.

I didn't doubt Google's ability to innovate; the question was just whether my choice of Android would mean to always be a year or two behind iOS. Tethering suggested to me that Google with its geeky product development culture (which based on various announcements at this week's Build developer conference may be pretty strong again at Microsoft) had the potential to turn Android into another Gmail. Gmail was late to the web email game, far later than Android was to the touchscreen mobile OS game, but I regard it as the most innovative email service ever -- the only one that constituted a paradigm shift (from "sort" to "search") -- and every other email service I know is still behind in terms of features that heavy-duty, cross-platform email users like me need.

I focused on the importance of competition to pricing in a recent post on the concept of ownership of product categories. That was a narrow focus, but you can't talk about everything in one post. What's no less important about competition is, of course, the pressure on companies to continue to innovate. In that regard, patents are a double-edged sword. On the one hand, they can protect investments in innovation by giving a pioneer a certain breathing space. That's why I'm seeking patent protection for something, too. On the other hand, with a 20-year span in a fast-moving area like information and communications technology, there's always the risk that excessive protection means the first one to come up with an idea won't be under enough pressure to implement it well and to build incremental innovation on top of it. If Steve Jobs had indeed held thermonuclear weapons against Google in his hands, which Apple has not established in more than four years of Android lawsuits, there wouldn't have been a memo like this one. The alternative to "catch up to Android where we are behind" would have been to "destroy Android using patents, spending the last penny of Apple's (then) $40 billion in the bank". (Actually, Apple would never have had $40 billion to spend on this if the likes of Motorola, Ericsson, Nokia, Sony and Samsung had used their patents to keep or force Apple out of the market.)

That would have been a scenario of IP as a cheaper substitute to innovation, not a means of protecting innovation. The net effect of this would have hurt Apple's customers and its most loyal fans, too. I recommend to the people I know in the Apple fan community who would like to see draconian remedies imposed on Samsung for Apple's competitive gain beyond what is warranted by its inventive contributions to the state of the art (I just borrowed language from a Federal Circuit ruling recently quoted by Judge Koh in Apple v. Samsung I) that they consider what this would mean. At the end of the day, it's not even in their best interest. What is in the Apple community's interest is to keep up the pressure on Apple, Google and Microsoft so that these companies' CEOs will write more memos of the kind Steve Jobs wrote in 2010 and that each company will work hard to catch up to others where it is behind at some point.

As long as Apple can afford to refuse to meet the strong demand for phablets just because it's more profitable to have fewer shelf-keeping units and because some customers might buy only a phablet instead of a phone and a tablet (and because it's easier for app developers to develop for only two resolutions, a problem that Google solved years ago with so-called fragments), there's a need for even more competitive pressure. While Apple's worldwide market share has already eroded to an enormous extent, the company is still growing and has a loyal customer base.

There's something else in that iOS-related "Strategy" bullet point that is directly related to the question of innovative capacity and competition. Steve Jobs's plan to "leapfrog [Google's Android]" at the time was primarily about Siri -- the only thing he names in that context, and the iPhone 4S feature that Apple emphasized about a year later. I remember that, too. Just like tethering gave me confidence in Google and Android, the fact that Apple's primary innovation (even if only for an incremental "S" update without a new version number) was something it had merely acquired had me concerned. I told people at the time that I thought Apple had peaked. Its stock price still continued to go up for a while (it more than doubled from that point, and it's still far above the fall 2011 level). There's nothing wrong with companies acquiring innovative technologies -- but core product innovation should still be "homegrown" for the most part, even at an enterprise software company like SAP and even more so at a company with Apple's innovative track record.

Google acquired Android, but a mobile operating system is not a core product for a search company, at least not at the time when it makes the acquisition.

The patent application relating to the '959 "unified search" patent Apple is asserting against Samsung in the ongoing trial was filed on January 5, 2000. (You can find this information on this page in the last line, "Filed", of the five-line bold-face section below the abstract.) Apple acquired Siri, Inc. on April 28, 2010. So the patent was homegrown, the actual software was not. But if the patent had been that incredible breakthrough, Apple would not have been sitting on it for more than ten years without building a Siri itself and would never have acquired an app development startup in an effort to "leapfrog" Android which had already overtaken iOS in some ways by the fall of 2010. And since there is such a clear disconnect between the patent and the product, Apple faces certain limits when pursuing injunctions and seeking exorbitant damages.

Again, Steve Jobs's recognition of Google's ability to outinnovate Apple in some areas is, in my mind, by far the most interesting revelation we owe to a trial that is, so far, only a sequel lacking some of the elements of the original movie.

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