Reality Check: Nokia’s iPad patent infringement headlines
May 11th, 2010
Daniel Eran Dilger
Headlines tell such a sensationalized side of the story. Here’s the missing bits of recent tech media events that have been reported with a slant, this time featuring:
Nokia sues Apple over iPad patent infringement.
.The suggestion: Apple stomped all over Nokia’s technology portfolio to bring you the iPad, meaning that it’s really Nokia that should be getting the credit for the iPad’s success.
The reality: Nokia’s new patent lawsuit is based on the same thing its last one was. It’s all about 3G and WiFi patents that Nokia legitimately owns, but illegitimately claimed it would offer to other vendor under nondiscriminatory terms, up until it realized that its own smartphones and tablets were getting trounced by Apple.
Nokia demanded three times as much money from Apple as other vendors (reportedly demanding as much as $12 per 3G device in royalties) while also insisting on gaining access to Apple’s own iPhone patents as well.
Nokia is promoting the idea that it only wants royalty payments for its technology, but the truth is that Nokia is trying to take credit for establishing open standards while also leveraging those open standards to punish Apple for being successful in a last ditch effort to prop up the tail end of its domination over the smartphone market.
Imagine the outcry if Apple were to attempt to extort licensing royalties for patented ideas in WebKit or HTML5 Canvas that it has already committed itself to sharing for free. You can bet the tech media wouldn’t be giving Apple a free pass on that like the one they’re currently affording Nokia.
Why Nokia is suing Apple over iPhone GSM/UMTS patents
Nokia’s smartphone slide
A major part of the reason Nokia is making a public relations splash out of its patent suit is that it’s doing really poorly in the business of actually designing, marketing and selling phones. It’s still the world’s largest vendor, but in the six months since I last reported on Nokia’s fortunes, it’s only slipped further toward the abyss.
Average selling prices for Nokia’s mobile phones dropped 7% in the first quarter of 2010, but its smartphones’ ASPs dropped by 18% (from 190 to 155 euros; currently $196 US. Apple’s iPhone ASP has consistently remained at around $600). In other words, the things Nokia calls a smartphone are selling for, on average, a third the price of the iPhone.
Nokia’s smartphones include very basic touchscreen models such as the Nokia 5230 and 5530. Nokia’s iPhone-class phone, the N97, is about as long in the tooth as Apple’s iPhone 3GS. The difference, however, is that Apple has a highly anticipated 4th generation iPhone coming out in a month along with the new iPhone OS 4, while Nokia has delayed its Symbian ^3 operating system launch to the third quarter, and has little to hype in terms of hardware.
Nokia would certainly like to focus on its more profitable high end smartphones, but that’s not where its sales are. Which is also why the company is now stretched across a variety of platforms: its Nokia OS “no frills” Series 30 and “basic” Series 40 embedded systems for simple phones; Symbian OS, its flagship smartphone system; various flavors of Linux that power the company’s not-quite-a-phone devices; and Windows 7 on its netbook experiment.
Like Verizon’s “two for one” BlackBerry and Android giveaway strategy in the US, Nokia is reacting to the iPhone juggernaut by dumping as many cheap devices into the market as it can to pad its sales volumes and market share figures. This was also the strategy the PC makers followed, leaving Apple as the cream on top of the PC market while they plunged to the bottom of the barrel with unprofitable sales of ultra cheap desktops and netbook devices.
Reality Check: NPD’s Android vs. iPhone sales headlines
Nokia Tablet going nowhere
While the company can still brag about selling the most mobiles and smartphones, it can’t say its selling anything significant in the emerging tablet category. Nokia’s been trying to sell tablet devices running desktop Linux for some time now, but they haven’t really caught on.
It has to be embarrassing to see Apple make its move into that category with iPad and immediately sell a million units. Without a competitive product to sell, all Nokia can do is blow dust in the air for a distraction, and what better way to do that than to suggest that iPad is a bunch of technology Apple illegitimately took from Nokia, regardless of whether that’s actually true or not.
All it has to do is see the idea by releasing an ambiguous statement about patent infringement allegations, and the tech media jumps to write the story for Nokia.