Apple's (NASDAQ:AAPL) legal battle against Samsung Electronics was always about more than money or patents. Ultimately, it was a battle between Apple and its mobile rival Google (NASDAQ:GOOG), which makes the Android platform that Samsung incorporated into its devices. With Apple's patent victory over Samsung, Google and its Android partners stand to lose.
Tim Cook may run Apple, but former CEO Steve Jobs set the company's legal strategy. Jobs famously told his biographer Walter Isaacson that he was so incensed with what he perceived as Android's copying of the iPhone that he was willing to go to "thermonuclear war" with Google over it.
If this was a case about patents and money, Apple would have likely settled. Why else would a famously secretive company be willing to reveal a slew of private and confidential information at the trial? Google's response to the verdict was a study in nonchalance. It noted that the verdict will be appealed and said that most of the patents at issue "don't relate to the core Android operating system, and several are being re-examined by the U.S. Patent Office." In other words: "What, me worry?"
Yet I think Google should worry. I also think that forecasts calling for Android to dominate smartphone shipments for the rest of the year may need to be recalibrated. Beyond the potential for U.S. sales bans, Android OEMs will need to differentiate their hardware and software even more to avoid falling victim to the missteps Samsung made. This will take time and money, and it is essentially a tax to Apple, which Android OEMs will pay on top of the patent tax many are already paying to Microsoft (NASDAQ:MSFT).
Ultimately, this could be good for the industry and for consumers as smartphone designs and user experiences become more differentiated. In the short term though, Apple is likely to make more money in an industry it already dominates from a profit perspective.
If the verdict serves as a warning for other Android handset makers it could also be a boon for Microsoft's Windows Phone, which has licensed Apple's design patents for the platform. Microsoft has gone out of its way to highlight its user experience differences from Apple and Google in its quest to attract more Windows Phone licensees.
Paul O'Brien, founder of MoDaCo, a site focused on Windows smartphones, said this: "Hear that noise? That's the sound of Android manufacturers ringing Microsoft right now."
Apple and Google were once partners--remember Google's Eric Schmidt on stage during the introduction of the first iPhone?--but this verdict crystallizes how bitter their rivalry in mobile has become. Apple bet it could beat Samsung, and by proxy Google, in court. and It won. Now Google and its Android partners have to pick up the pieces.--Phil