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Verizon iPhone? Motorola Sues Apple? It's the Smartphone Wars: Conspiracy Edition

Motorola (MOT) sues Apple (AAPL) for alleged patent infringement by the iPhone even as Microsoft (MSFT) sues Motorola. Apple readies a Verizon (VZ) iPhone. MG Siegler says that Apple planted the story with its favorite pocket pal Wall Street Journal reporter Yukari Iwatani Kane to counter stories about Android's market growth. (I'm with Siegler on that and wonder at what price such favored whispers come.)

Keeping abreast of the smartphone wars has become a full-time job in itself. But sometimes it pays to step back and try to discern greater patterns from the details. And, in this case, some of those patterns look like conspiracy theories. Though, if you think of how industry works in general and how high tech has been known for alleged collusion, that isn't necessarily grounds to dismiss them.

So put on your tinfoil hats. Let's start with a recap of the smartphone patent wars:

  1. In 2008, RIM (RIMM) sued Motorola for allegedly charging excessive royalties on patents.
  2. In November 2009, Nokia (NOK) sued Apple for allegedly infringing on networking patents.
  3. The next month, Apple sued Nokia for allegedly infringing on user interface patents.
  4. In March of this year, Apple sued HTC (as Microsoft approvingly looked on) for allegedly infringing 20 different patents with both Android and Windows Mobile handsets.
  5. Shortly after, HTC sued Apple for allegedly infringing on five patents.
  6. In August, Oracle (ORCL) sued Google (GOOG) over alleged infringements on Java patents.
  7. Microsoft brought a patent suit against Motorola a week ago.
  8. Motorola sued Apple yesterday.
Notice a few key facts:
  • Google (GOOG) is a direct defendant in one suit, but is indirectly connected to others as Apple and Microsoft have targeted Android-fueled phones.
  • Apple and Google are the newcomers to the mobile space.
  • Apple and Microsoft are long-time frenemy business partners and rivals.
  • Microsoft has partnered with Motorola and HTC in the past, and likely wants to do so again.
  • Both Nokia and Motorola say that Apple has refused over time to license their patents.
What this suggests is a shifting set of alliances. There are two major camps. On one side are the old-line handset companies -- equipment manufacturers, chip makers, and one big software provider. They all cross-license patents because it's the only way to get anything done in the space without getting your butt sued. All of them have intellectual property to offer, so they all get a deal to clear legal hurdles in their way.

On the other side are Apple and Google, who don't haven't joined in the appropriate patent pools. That alone means that their costs of doing business are lower, given them an advantage over their competitors, who are locked into the cross-license deals. (Even if the others don't pay money, they do give up potential royalty revenue to avoid having to pay someone else, so there is opportunity cost, at least.)

That means both Apple and Google get their business models underwritten by everyone else. Apple reportedly wants the same licensing deal as everyone else, but apparently isn't offering the cross-licensing that the others have to provide, as that would likely mean giving up key user interface advantages on the iPhone.

However, things get complicated. For example, Apple and Microsoft -- otherwise known as the two other big independent mobile operating system vendors -- would both want to attack Google, which is on pace to become the dominant mobile operating system. Although they might technically be able to sue Google, that opens the door to charges of anticompetitive behavior and attempts to gain a monopoly. On Microsoft's side, it might be more effective to attack Google indirectly by targeting smaller hardware companies without the same financial resources and then putting pressure on them to reconsider working with Android.

Steve Jobs clearly is worried about Android. His interest is better served if Microsoft can take part of the non-iPhone smartphone market share, weakening Android. And all the existing vendors are better served if they can force Apple to pay higher royalties or provide rights to some of its innovations.

So as a result, there's a constantly shifting set of who is working with whom, and some of what appears one way on the surface is likely something else entirely. Is Microsoft really at war with Motorola? Probably not. More likely, the suit becomes a way to get Motorola to build Windows Phone 7 devices. And pressure on Apple also serves Microsoft's interests.

Expect many more convolutions and temporary alliances as all the companies try to use every circumstance to gain advantage. Still to come: expect HP (HPQ) to flex its muscle, given that it plans a webOS phone for next year and owns Palm's significant patent portfolio.


Image: Flickr user ardenswayoflife, CC 2.0.
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