Analyst: Apple warned handset makers before suing HTC

An analyst report says that Apple gave plenty of warning that it intended to sue competitors it believed moved too close to iPhone's territory.

Erica Ogg Former Staff writer, CNET News
Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur.
Erica Ogg
3 min read
HTC Apple lawsuit
HTC is the manufacturer of the Google Nexus One phone, which Apple says is one of several phones that infringe on iPhone-related patents.

Apple's suit against HTC for patent violation didn't appear out of the blue, according to an analyst report Tuesday.

In January, Apple began approaching the executives of competing handset makers and warning them it planned to take legal action against those that infringed on technology related to the iPhone, Oppenheimer analyst Yair Reiner wrote in a research note, first reported by Fortune. Reiner says he learned this by doing "checks" with his industry sources, and found out that Apple's warnings actually appear to have derailed the development plans of future iPhone competitors, though he doesn't specifically name which ones.

But it clearly didn't include HTC, the Taiwanese handset maker that Apple sued last weekover 20 iPhone-related patents.

At the time Apple CEO Steve Jobs said in a statement, "We can sit by and watch competitors steal our patented inventions, or we can do something about it. We've decided to do something about it." But Apple had actually put its competitors on notice over a year earlier. That was when COO Tim Cook, filling in for Jobs on medical leave, bluntly said on an earnings call, "We will not stand for having our IP ripped off," and declared the company would use "every weapon at out disposal" to prevent it. At the time he declined to name a specific company, though it was widely interpreted to be directed at Palm's new Pre, which was designed by former Apple engineers hired by Palm.

Turns out, it was intended more broadly, according to Reiner's industry sources. Apple's warning reverberated through the executive suites at many competing smartphone manufacturers. "Rival software and hardware teams are going back to the drawing board to look for work-arounds. Lawyers are redoubling efforts to gauge potential defensive and offensive responses. And strategy teams are working to chart OS strategies that are better hedged," according to the analyst.

Apple has not yet responded to a request for comment on the report.

The result was that some of the iPhone's closest competitors stayed away from features like multitouch for most of the year, that is until the Motorola Droid and HTC Eris arrived. Both phones featured multitouch software, and Google's Android OS. The Nexus One, also from HTC, and featuring multitouch, then arrived in January, which was apparently when Apple began approaching other companies about patent infringement.

HTC wasn't the only one that was privately feeling Apple's legal wrath, but so far it's the only one to have been served with legal papers. Oppenheimer echoes the opinion of many in the industry that HTC has been targeted because of its close relationship with Google, Apple's former buddy and current frenemy.

So is getting too close to Google dangerous for phone manufacturers if they want to avoid any legal threats from Apple? Reiner says many will interpret it that way and turn to Microsoft's forthcoming Windows 7 Mobile platform. He doesn't offer any specifics other than to say Microsoft has started "aggressively promoting" its own patent portfolio and ability to defend its customers.