Apple Can Now Buy Dell. Twice Over. And Still Have $10 Billion in the Bank.

“What would I do? I’d shut it down and give the money back to the shareholders”.

That’s what Michael Dell, the CEO of Dell Inc. said in 1997, when asked how he would fix Apple, which was in dire straits then.

What he didn’t (and couldn’t) anticipate, was how Steve Jobs, the co-founder of Apple, who was ousted out a few years back, and returned as CEO only a few months before he made the statement, would completely change the computing and mobile landscape, and turn Apple into the juggernaut it once was, and even bigger.

Apple Logo

Yesterday, Apple released its Q3 FY11 earnings results, and to be honest, they were mind-blowing. Apple’s results beat even the most bullish estimates on the street, and of course, its own guidance.

Its market cap is now close to $360 billion, more than 10 times Dell’s market cap. It is very likely that Apple may soon overtake Exxon Mobil to become the most valuable company in the world. My money is on that happening soon after the iPhone 5 launch, assuming that oil prices remain relatively stable.

But here’s the most interesting part – Apple now has almost $76.2 billion in cash reserves. That’s the biggest war chest of cash held by any company, ever. What’s even more interesting is that Apple can now buy Dell (market cap: $33 billion) using just its cash reserves. Twice over. Even then, it will still have $10 billion left in the bank.

Michael Dell may be regretting ever making that statement now, with Jobs having the last laugh.

Samsung Galaxy S2 to be Launched in the US in August

Consumers in the US usually get all the cool gadgets first, while their counterparts in other countries have to wait for months. Thankfully, there are some exceptions to that rule.

The Samsung Galaxy S, for example, was first launched internationally, and came to the US market only a few months after the initial launch.

Similarly, the Samsung Galaxy S 2, which was first launched in Korea 3 months back, and subsequently in many other countries including India, has not been launched in the US yet.

However, images of a Sprint variant of the Samsung Galaxy S 2 were leaked last week, which seemed to indicate that a US launch was probably near.

Today, Yonhap News reported that Samsung will launch the Galaxy S2 in the US market next month.

“We expect to release the Galaxy S2 in the U.S. market sometime in August,” said Shin Jong-kyun, president of Samsung’s mobile business and digital imaging, at a media briefing.

The Samsung Galaxy S 2 is widely regarded as the best Android smartphone to date. It has blown away the competition and has sold more than 3 million units in less than 2 months of its availability. It is probably the only Android smartphone, which can compete with the Apple iPhone 4, in terms of popularity.

You can check out our comparison of the Samsung Galaxy S2 and the Apple iPhone 4: Samsung Galaxy S 2 vs Apple iPhone 4: Comparison

Apple is expected to launch the next version of the iPhone in September. Samsung expects to sell more than 60 million phones this year, including Android smartphones as well as other budget phones.

Like its predecessor, the Galaxy S, it’s likely that the Samsung Galaxy S2 will be launched on all major carriers. Stay tuned. The Droids are coming.

Google on the HTC-Apple Lawsuit: “We Will Make Sure They Don’t Lose”

Apple has already won the initial ruling in its patent infringement lawsuit against HTC, which alleged that HTC had infringed upon two of its patents by using the Android OS in its devices.

With the HTC lawsuit almost won, Apple has a very good chance of winning similar lawsuits against other Android manufacturers, as most of them use the same features described in the lawsuit.

With this set of patents, Apple joins the exclusive club of those companies who stand to make billions in revenue from Android, which currently include Google, Microsoft and Oracle.

I also pointed out that Apple now had a chance to shut down the sale and import of all Android devices in the US, though it may have seemed a bit far fetched.

Today, at the Google Mobile Conference in Tokyo, Eric Schmidt said that his company will back HTC in its patent fight against Apple.

“We have seen an explosion of Android devices entering the market and, because of our successes, competitors are responding with lawsuits as they cannot respond through innovations,” he said. “I’m not too worried about this.”

He also commented that “We will make sure they don’t lose, then”, when asked whether Google will be providing financial assistance to HTC. He didn’t reveal any more details, about how it planned to defend its HTC and its other hardware partners.

Google doesn’t have nearly as many patents in its arsenal as Oracle, Microsoft or Apple. It recently lost the Nortel patent auctions, which could have doubled its patent portfolio and provided it with some much needed ammunition in its patent wars against Apple and Microsoft.

Could Apple Shut Down Android in the US?

As we all know, Apple has been involved in patent infringement lawsuits with some of the most popular Android smartphone makers, including HTC, Motorola and Samsung. On Friday, a US International Trade Commission judge ruled that HTC did infringe on two patents that Apple mentioned in its complaint. HTC has appealed the ruling, but it is very likely that the judge’s original ruling will be upheld.

Now, there are three scenarios which are most likely to play out.

1. HTC removes the features which infringe on those patents from its Android devices and pays Apple damages for past infringement.

2. HTC licenses those patents from Apple, and pays Apple a patent licensing fee for every device plus damages for past infringement.

3. Apple refuses to license the patents to HTC, and calls for an immediate ban on all HTC devices powered by Android in the US. Well, that, and HTC pays Apple damages for past infringement.

Now the two patents, which HTC allegedly infringes upon are related to a “system and method for performing an action on a structure in computer-generated data” and a “real-time signal processing system for serially transmitted data”.

According to Florian Mueller, both these patents are infringed by code which is at the very core of Android. Given that these patents are central to Android, it is likely that all Android devices infringe them as well. HTC might find a way to remove those features to avoid infringing those patents, but that seems quite unlikely as well.

In that case, if Apple does win against HTC, there is no stopping it from going up against all the Android device manufacturers in the US.

Since the first option seems highly unlikely, we now consider the other two options.

HTC licenses patents from Apple

HTC could just license those patents from Apple for a fee. It already has such arrangements with Microsoft, under which it pays Microsoft $5 for every Android device sold. But I highly doubt this could ever happen.

Apple moves for a ban against HTC’s Android devices in the US

Apparently, Apple doesn’t need any patents from HTC, so with no cross licensing needed, it could easily just shut down the sale and import of HTC’s Android devices in the US.

It obviously won’t go for the money, not when it has a chance to completely ban HTC’s Android devices in the US, thus gaining an excellent competitive advantage against Google.

If it wins against HTC, it has a chance to do the same against other Android manufacturers as well. However unlikely it may seem now, this could eventually lead to a ban of Android devices in the US.

Android is under fire from all fronts. Either Google, or Android device manufacturers are being sued by Apple, Microsoft and Oracle for patent infringement related to Android.

Microsoft has already turned Google into a billion dollar cash cow. Apple has a chance to make much more if it can get a ban on all Android devices in the US. If that happens, Apple could stand to gain significant market share in the US, and become the leading platform. Under these circumstances, the second beneficiary would be Microsoft, which has the only viable alternative to Android – Windows Phone 7.

Android, which is considered one of Google’s greatest successes to date, may turn out to become one of its greatest problems. Everyone else is ganging up against it, case in point: the Nortel patent auctions. Pardon me for sounding sensationalist, but could this be the beginning of the end of Android?

Who can compete with the iPad?

The iPad is the king of tablets

Apple’s iPad has dominated tablet sales so far. Android tablets have started making some dents, but none of them are really gaining steam as a product (vs. Android tablets gaining some share as a collection). Harry McCracken at Technologizer asked the simple question every tablet maker should be asking at the time of creating their products: Why should someone buy this instead of an iPad?.

Not just the hardware

The iPad and iPad2 are exceptional products by themselves. Great design (although, I could do with a non-glossy/non-reflective screen), light enough to be really portable, GREAT battery life, and to me, a good size for a screen which would be used for media consumption like movies and TV shows via Netflix, hulu and the like.

The key to their success though, besides the hardware itself and the beauty of the operating system, is the ecosystem. The apps, music, movies, podcasts, iTunes U, and the sometimes overlooked accessory industry. Apple has made slow and steady progress in putting these pieces together and has a seemingly invincible position, but in the world of technology today, it could be very short-lived.

Of course, the starting price of $500, thought by many at the time of the iPad launch to be too high, seems like another killer feature of the iPad.

Ecosystem providers, real competition

Who can really compete with the iPad? Not just the tablet, but the entire package of the tablet, the ecosystem, and the price? Remember, it may be ok to just meet the iPad, but in order to create a serious dent, the competition has to have a pretty big advantage on almost all of the aspects. So, let’s see who is competing:

  • Android at the low end: Cheap Android tablets are everywhere but they may not have Google’s blessing and as a result be cut off from the first-class Android experience, including the Android Market. So they have the price advantage but nothing else.
  • Android at the top end: Motorola XOOM and Galaxy Tab started off as 3G devices sold by the carriers. They required a data contract or ended up costing more without data contract, than an iPad. They suffered from the data contract/price issue to start with, but more importantly, there are hardly any apps for Android in the tablet form factor. An ecosystem though, is not just about the apps, it should also provide a good collection of music, movies and TV shows, which Android seems to lack today.
  • HP TouchPad with webOS: HP recently launched the TouchPad and the sales as well as reviews are not encouraging. HP has a problem similar to Android tablets in terms of getting quality apps available for the customers. It does not have to be hundreds of thousands of apps like the iPad apps, but when you start from zero, it is really an uphill climb. HP does not have a marketplace for music, videos and TV either, but it is big enough to cut some deals and get something going. The point right now though, is that there is nothing on offer, making it difficult to justify the purchase for consumer use.
  • RIM Playbook and Windows 7 slates: I won’t go into too much detail because it is clear that RIM released this thing too soon. It is an unfinished product and has been a flop so far. It is hard to imagine a product from the maker of Blackberry devices that does not have native email and calendar. Native email and calendar are supposed to be coming this summer, but until then it is an incomplete product.   I am similarly ignoring Windows 7 tablets like the the Asus slate, because Windows 7 Touch seems like touch was slapped on Windows 7 rather than it being built for touch-first use. While it works much like a PC, thereby providing a healthy ecosystem to rely on, it is not really an iPad competitor because it is not as light, and is way more expensive.

Windows 8, Amazon tablet Two legitimate competitors

We know very little about Windows 8 and almost nothing about the Amazon tablet. In fact, we don’t even know if any such product is going to come from Amazon, but here is why I think either of these, or both, are going to be viable competitors to iPad (and also lay out conditions for their success).

Windows 8 (especially ARM version): ARM is known for its power efficiency, and we can assume that it will enable small form factor Windows 8 devices with a long battery life. Combine this with the public announcement by Steven Sinofsky that Windows 8 system requirements are going to be same or lesser than Windows 7, and we have a good chance of seeing Windows 8 tablets/slates in the iPad form factor with similar battery life. Windows has a great ecosystem which it supports on the XBOX and Windows Phone, in the form of the Zune Marketplace. It provides a huge collection of music, movies and TV shows. Windows of course, has the most extensive applications catalog (although the current Windows applications will not automatically work on ARM, but will do on Intel architecture as-is). Windows Phone has rapidly grown its app catalog, starting from zero in October/November of 2010 to about 25,000 this June. Since we don’t know what Windows 8 application development will be like outside of HTML/Javascript, let’s just assume that the app ecosystem will be rich enough to start with. This assumption is generally for Windows 8 with full support for legacyWindows applications. We cannot discuss ARM applications until we know more, supposedly at the //build/ conference in September this year.

One concern I have is that Microsoft seems to be fixated on the fact that tabletsare full PC’s, just in a different form factor. Maybe they consider slatesto be the lightweight PC with a similar form factor. I hope that one way or the other, that they understand that there is a product category which is not necessarily a full PC, but serves the purpose of casual computing much like the iPad does today.

Amazon tablet: Of all Android tablet makers, Amazon surprisingly is poised to be the best equipped in terms of an ecosystem it supports music, movies, TV shows, instant streaming, subscription, cloud storage, cloud music player, digital goods, and very recently, even its own curated Android market for apps! It has already shown manufacturing prowess with the highly successful Kindle, although I understand components for a tablet are different from those used in making the Kindle. Amazon also has a great retail shelf spaceto sell their tablet, and that is their home page, visited by millions of people every day.

If they can pull off a 9- or a 10-inch tablet built on Android with their own marketplace for apps, movies, music and TV shows, they would immediately be a competitor.

It is strange that I feel most optimistic about something that we may not see for one more year, and something that does not even exist as a product today. Such is the state of iPad competition (or lack thereof) today, that we are left to place our bets on almost-unicorns and unicorns.

I sure hope there is some real competition for the iPad though, because that can only be good for us, the consumers. Right?

Lodsys Widens Its Net, Goes After More Application Developers

Let me make one thing clear right from the outset, like most other normal people, I hate money hungry scumbags. Hence, it is but obvious that I don’t hold patent trolls like Lodsys in very high regard. If the name Lodsys doesn’t ring a bell, then here’s a quick recap of what has happened so far.

Lodsys LLC owns four patents that were granted to it between 1999 and 2009. As far as I can tell, Lodsys has never manufactured any product. Creating documents describing some pretty mundane processes is as far as its innovative streak went. Nevertheless, since one of the patents (US 7,222,078) granted to Lodsys seemingly describes an in-app purchase mechanism, Apple, Google, as well as Microsoft, licensed the concerned patent from Lodsys. However, not being content with just wrangling money out of the big names, Lodsys decided to target the defenseless the individual app developers. It threatened and then sued several iOS and Android application developers who had implemented in-app purchase mechanisms into their apps by using the APIs provided by Apple and Google respectively. Thankfully, Apple stepped in to defend the developers who were being harassed unfairly. It first fired an opened letter, and then officially filed a motion to intervene. On the other hand, Google, the company that desperately tries to promote a do-gooder image, has done absolutely nothing so far to show that it gives a damn about the developers who are responsible for building the Android ecosystem.

TrollSadly, greed knows no bounds. It now appears that Lodsys is even targeting apps that don’t employ in-app purchase mechanisms. EpicForce Entertainment, the developer of iFighter 1945, which doesn’t use in-app purchase, received a notice from Lodsys demanding royalties. When EpicForce replied back explaining their position, this is what a certain Harry Snodgrass had to say on the behalf of Lodsys:

My name is Harry Snodgrass and I have been assigned your account. I would like to respond to your email dated July 4th, 2011 attached below. First let me state that Lodsys is interested in a positive dialog with the goal of a prompt and reasonable resolution to this matter.

In your email you refer to the following – “directed to systems and methods for providers of products and/or services to interact with users of those products and services to gather information from those users and transmit that information to the provider”.

The title of a patent, such as stated above, is a general description of the area the patent addresses to allow for more efficient searching of patents and their general subject matter. The patent we sent a claim chart for has a claim that is directed at eliciting from a user, through a user interface presented by the product or service, a perception of the user of the product or service.

The patent specification sets forth many different types of perceptions and how they may be elicited. One of those is through interactive services and transactions. Specifically, a perception that can be elicited is the desire of the user to indicate their desire to purchase something that is related to or complementary to the product or service.

In this specific case, the perception being elicited through the offer to the user to buy “Super Laser: The Alien Fighter” through the interface presented by iFighter 1945 is, Do you find our games valuable enough to buy another game we think you are interested in from us?. The elicited perception is returned to you (you are the vendor of both iFighter and Super Laser) through the revenue you receive from the app store for the purchase of the new game.

I trust that this has clarified the matter and that you now understand that we are not mistaken. We would like to enter into meaningful discussion with you about an appropriate license that is scaled to your use of our patented invention. We look forward to doing that as soon as possible.


Harry Snodgrass

Harry Snodgrass
Licensing Agent

In other words, being the douchebags that they are, Lodsys is now trying to take advantage of the ambiguous wording of the patent documents to extort money from developers who employ cross-promotion through More Gamesor similar techniques. James Thomson had earlier spotted a similar instance.

Just found out that one of the targeted developers isn’t even using in-app purchase – just a button that opens a link to the App Store.less than a minute ago via Twitter for Mac Favorite Retweet Reply

It is obvious that the current patent system is broken. The situation is spiraling out of control with pretty much everyone suing everyone else. The patent system might have been created with the idea of fostering and rewarding innovation, but these days it is doing exactly the reverse. Interestingly enough, IBM seems hell bent on patenting the art of patent trolling. They haven’t had much success yet, but I am rooting for them. If IBM is indeed granted the patent, then theoretically they might be able to use that to sue the hell out of patent trolls like Lodsys. Now, that would indeed be poetic.

iOS 5 Beta 3 Adds AirPlay Support for FaceTime

FaceTime via AirPlay

TiPB has discovered that in the third beta of iOS 5 a new featured has been activated. The feature is  AirPlay streaming support for FaceTime video calling, and allows  users to display FaceTime video calls directly on a large-screen TV for easy viewing by larger groups of people.

If this makes it into the final release — and not everything does — it’ll be fantastic for families and businesses alike.

The ability to easily start a video call and beam it onto the big screen is compelling. Whether it’s grandpa and grandma, or the team in England, it takes FaceTime from a small, personal experience to a big, group experience at the touch of a button.

This feature definitely adds will be useful for video calling in group settings. iOS 5 is expected to be released sometime in Fall.

Apple Now Accepting Mac App Store Apps for OS X Lion

Apple has started to notify developers  to submit Mac App Store submissions for OS X Lion. Yesterday, Apple sent  out an email to developers  saying that OS X Lion will “soon be available to millions of Mac users around the world.”  They want to ensure that Mac apps are OS X Lion compatible so they can be available on the Mac App Store when OS X Lion ships sometime this month.

OS X Lion dev email

Apple has said that OS X Lion will become available later this month, and rumors have suggested a launch date for the 14th. Once released, OS X Lion will only be available via the Mac App Store.

Backlit Keyboard To Return In New MacBook Air?

MacBook Air backlit keyboard

When Apple first introduced the MacBook Air, they offered a backlit keyboard. According to a new report, the backlit keyboard will be making a return to the MacBook Air with the new 2011 models that are expected to be released soon.

AppleInsider reports that, that the MacBook Air refresh will bring back this popular feature.

According to people familiar with the matter, backlit keyboards will join the string of hardware enhancements planned for the new 11.6- and 13.3-inch notebooks, which are also expected to adopt high-speed Thunderbolt ports, an upgrade to Intel’s Sandy Bridge architecture, and possibly high-speed 400MBps flash memory.

The backlit keyboard makes it easier to type in low light areas. Apple currently offers the backlit keyboard in their MacBook Pro notebooks. New MacBook Airs are expected to be released soon with part numbers already leaked.

The Apple iPhone Still Rules the US Smartphone Market

Comscore has released some updated figures about smartphone OEMs (original equipment manufacturers) in the US. It gives us some pretty interesting insights into the dynamics of the US smartphone industry, though much of it is quite obvious.

US Smartphone OEM Market Share For the three months ending May 2011, the total number of smartphone users in the US were 76.8 million. As expected, Apple was the top smartphone device manufacturer with a 26.6% market share with the iPhone 4 and the iPhone 3GS.

RIM is still quite a dominant player with a 24.7% market share with its Blackberry devices.

Next come the top three Android manufacturers – HTC, Motorola and Samsung with a 11.8%, 11.4% and 8.9% market share respectively. Samsung has been increasing its share quite a lot with the Galaxy range of devices, but it still comes after HTC and Motorola, which have had a very good lead in the US market.

LG has only a 4.8% share while HP has a 2.7% share with the new Palm smartphones. Nokia, as always, has a very low market share in the US market (2.1%), which is decreasing further.

While Android is the number one smartphone OS, Google hardly makes any Android phones. It just has the Nexus One and the Nexus S which form only a minute fraction of the total Android sales in the US.

The iPhone is, undisputedly, the king of the smartphone industry, at least in the US.