Apple's Taking Its Eye Off the Ball
Nov 7th 2012 6:32PM
Updated Nov 7th 2012 6:34PM
Before he died, Steve Jobs said he would spend Apple's (NAS: AAPL) enormous cash hoard going after companies who copied the company's intellectual property. Well, the efforts Apple has made so far have been anything but successful.
Not only is Apple losing legal battles around the world, it's beginning to show weakness in its own product line as competitors slowly catch up. Maybe it's time for Apple to stop focusing on the courtroom and turn its attention to the lab.
Apple losses pile up
The headline case for Apple over the past six months has been the jury case that found Samsung guilty of infringing on a few of Apple's patents. But as I pointed out at the time, the $1.1 billion judgment isn't likely to hold up on appeal, and I wouldn't be surprised to see an outright reversal when technical judges get the case .
But that isn't Apple's only challenge in the legal system. Here are a few of the losses the company has endured in recent months, some downright embarrassing for the company.
- On Monday, a federal judge threw out Apple's lawsuit against Google's (NAS: GOOG) Motorola Mobility over the licensing of the Android operating system.
- In Japan, Apple lost a suit against Samsung over the way the company syncs music and video between devices and servers.
- In Germany, Apple lost two patent suits against Samsung and Google over touchscreen functions.
- On a more embarrassing note, a U.K. judge made Apple not only apologize, but also revise its original apology after losing a case against Samsung. Apple also posted an apology for the first apology on its U.K. site, which read, "On 25 October 2012, Apple published a statement on its UK website in relation to Samsung's Galaxy tablet computers. That statement was inaccurate and did not comply with the order of the Court of Appeal of England and Wales." Talk about a mess for Apple!
Apple is spending a lot of time, energy, and money on suits around the world that are almost unanimously ruling on the side of the competition. If Apple's U.S. verdict is overturned, the company won't even have that highlight to point to.
Competition has moved on
The challenge with suing technical companies is that by the time you get a verdict, both sides have moved on. The Samsung devices that looked nearly identical to the iPhone are now years old and the Galaxy S3 that is taking share from Apple looks nothing like the iPhone from a technical perspective.
As an example of the impact of these legal battles, let's go back to Microsoft's (NAS: MSFT) long, drawn-out antitrust case relating to Internet Explorer. The government first began looking into Microsoft in 1991 and the court didn't reach a final judgment until 1999, and that doesn't even include appeals. By the time the courts ruled, Netscape was dead and Internet Explorer was no longer an important pawn in the PC market.
Now think about how fast the smartphone and tablet markets change. By comparison, it makes Microsoft's IE case look like a snail. Companies release new updates on popular phones at least yearly and many manufacturers offer multiple options, so it's a moving target for Apple.
Even if Apple were winning cases against Google or Samsung, both companies would likely have designed around the infringements by the time a ruling came out. A financial hit might ding each company, but they're still taking market share, which is really the end goal .
Apple has bigger problems
For Apple, there has to be bigger fish to fry than these patent lawsuits. Management's time would be better served fixing the new Maps app, solving production shortages, or developing new products than worrying about products the competition doesn't even make anymore.
Google's Android operating system is now ahead of Apple in market share and Microsoft's partnerships with Nokia (NYS: NOK) , Samsung, and Intel (NAS: INTC) will make a splash in smartphones and tablets. Combine that competition in smartphones with real threats from Amazon (NAS: AMZN) , Google, and Samsung in tablets, and Apple has its hands full outside of the courtroom.
Keep your eye on the ball
Apple is still a dominant player in smartphones and tablets, but I think its focus on battling competition in court instead of focusing on products is hurting the company. Apple has shown rare shortcomings in the past year and these need to be resolved more urgently than Apple's legal battles.
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The article Apple's Taking Its Eye Off the Ball originally appeared on Fool.com.Fool contributor Travis Hoium manages an account that owns shares of Intel and Microsoft and is short Amazon.com. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw. The Motley Fool owns shares of Apple, Amazon.com, Google, Intel, and Microsoft. Motley Fool newsletter services recommend Apple, Amazon.com, Google, Intel, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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