The Teacher

October 9, 2011 – 7:51 pm | Edited by Frédéric Filloux

Steve Jobs taught us so many things… To us whose professional life strides tech, ads and media, his way of fostering innovation, of creating an obsessive culture of perfection remains both inspirational and enigmatic. For those who like design and engineering, there isn’t a single field Apple hasn’t entered — or at least influenced. When I fumble with the appalling multi-function display of my Prius, when I struggle with the remote control of my office A/C, or when I wonder why in hell the $2000 battery-assisted bicycle I consider buying doesn’t have an programmable memory chip to upgrade software that looks forever stuck in version 1.0, I wonder how the Cupertino guys would have handled it. Needless to say, I do the same when I look at media applications or newspapers/magazines designs, many of which seem to have succumbed to a sad mélange of sloppy execution and a lack of decisiveness in design.

For years, I have been reading everything I could about Apple from the management/innovation perspective. As a business journalist, I find Apple being the most frustrating company to follow. Very little comes out. The culture (and the cult) of secrecy extents way beyond any employee tenure; even the usually profligate academic literature is rather bare when it comes to Apple.

Front page of Liberation

However, over a span of fourteen years, as it impacted so many sectors, Apple’s unprecedented turnaround yielded a few clues. I tried to isolate some with potential applications outside the tech world. What interests me in Apple ranges from their choice of frosted-glass for my MacBookPro’s trackpad (instead of cheaper plastic), to the use of its immense cash hoard, to the way the company prepared itself for the post-Steve Jobs era. Read More »

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Too soon…

October 9, 2011 – 7:48 pm | Edited by Jean-Louis Gassée

‘Humor is the politeness of despair’, an approximate, googlish translation of l’humour est la politesse du désespoir, a saying attributed to noted post-WWII Left Bank jazzman, writer, and engineer, Boris Vian, So, let’s start with the reverent, despairing humor of Chris Calloway in Wired Magazine’s memorial to Steve Jobs:

“Heaven got a major upgrade today…”

Yes, I can see Dear Leader in his new abode. Having climbed his last mountain, he summons Saint Peter and utters the words that he has heard throughout his life: “You’re doing it all wrong.”

“Look at the name above the door, the typeface sucks, the kerning is off. The furniture is out of style — get something cleaner, fresher. And the stairs… We need something airier…I don’t know, glass? Come to think of it, one of the founding partners of the architecture firm that designed the Apple Store moved in here a few months ago. Bernard Cywinski; look him up get to work.”

…and then it’s Saint Peter’s turn to mourn Steve’s untimely demise, and his own lost tranquility.

[Update: I just found this picture of the New Yorker’s upcoming October 17th cover. Obviously, this is before Steve starts to take matters into his own hands.]

Back in our Valley of Tears, this Onion article provides just the right amount of serious thought wrapped in knowing derision. I can’t resist but quote the entire piece, it’s too good and, in a way, it’s a consolation:

“Last American Who Knew What The Fuck He Was Doing Dies

Steve Jobs, the visionary co-founder of Apple Computers and the only American in the country who had any clue what the fuck he was doing, died Wednesday at the age of 56. “We haven’t just lost a great innovator, leader, and businessman, we’ve literally lost the only person in this country who actually had his shit together and knew what the hell was going on,” a statement from President Barack Obama read in part, adding that Jobs will be remembered both for the life-changing products he created and for the fact that he was able to sit down, think clearly, and execute his ideas—attributes he shared with no other U.S. citizen. “This is a dark time for our country, because the reality is none of the 300 million or so Americans who remain can actually get anything done or make things happen. Those days are over.” Obama added that if anyone could fill the void left by Jobs it would probably be himself, but said that at this point he honestly doesn’t have the slightest notion what he’s doing anymore.” Read More »

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Dreaming at the Kindle Potential

October 2, 2011 – 10:01 pm | Edited by Frédéric Filloux

With each introduction of a new reading device publishers around the world are overcome with the same recurring same fantasy: What if it worked, this time around? Could a reliable business model emerge for news publishing companies?

Last week’s launch of new Kindles is no exception to the cyclic fantasy. For those who where on Mars last Wednesday, here is a look at the revamped family:

To sum up: the new lineup features the widely expected Kindle Fire (full color display, multimedia capabilities and the clever, cloud-accelerated Silk browser — see Jean-Louis’ column). In addition, Amazon redesigned its e-Ink based Kindle with two models, including a small 6 inches version that fits in a pocket. All of them priced aggressively, below their production cost.

A lot has been written comparing Apple’s iPad and Amazon Kindle devices. Exciting but not relevant. The two companies’ strategies can’t be more diametrically opposite. Apple is in the hardware business and all other product lines — software, media offerings — exist for the sole purpose of raising perceived value and units volume. Then, great product execution and streamlined operations help maximize margins. Apple’s gross margin on iPads is about 30%.
By contrast, Amazon is a digital retail company in which all forms of media — books, videos, music, games –  account for about 40% of its sales. Its hardware strategy is designed to funnel customers to its retail business.

This explains why Amazon doesn’t care much about Kindle hardware margins, and is much keener to strike deals with content providers than Apple is. In parallel to the launch of its news Kindles, Amazon has harvested a large set of deals with media companies. Its Kindle Fire Newsstand is already impressive and features a 3-months free trial for a selection of magazines. Symmetrically, a growing number of publishers keep complaining about Apple harsh terms; as a result, in the coming months, we’ll see many prominent publishers exit the Apple ecosystem and switch instead to web-based apps (a move that is actually more complicated than it appears). Read More »

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Google’s “Interesting” Week

October 2, 2011 – 9:48 pm | Edited by Jean-Louis Gassée

Let’s start gingerly, with Nokia. You’ll recall the indignation when Nokia threw Symbian under the Windows Phone 7 bus and osborned its existing product line. Nokia dead-ended Symbian handsets, causing sales to plunge while everyone waited for the new MicroNokia smartphones.

The company didn’t stop there.

It then presented Meego, the offspring of Intel’s Moblin (as in Mobile Linux) and Nokia’s own Maemo (also Linux-based), as their weapon of the future. This was their killer smartphone OS.

But Nokia gave up on Meego. The result was a risky but greatly simplified product strategy: One OS, WP7, instead of three or four versions of Symbian, S40, S60, Symbian^3, and Meego.
Such simplicity couldn’t last.

We now hear that Nokia is developing an operating system called Meltemi, the name of a Greek wind (I’m not making this up). The new OS targets the low end and intends to replace the S40 engine for Nokia’s dumbphones, a.k.a. feature phones.

A few thoughts.

First, both Meego and WP7 were, and are, too heavy for entry-level phones.

Second, Nokia sees a future in low-cost, low-margin products. Today’s smartphone BOM is excessive, north of $100, and that’s before the handset maker, Nokia in our case, gets a slice of the pie. Read More »

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The Capsule’s Price

September 25, 2011 – 9:12 pm | Edited by Frédéric Filloux

Do encapsulated digital editions make sense? Is the notion of having a “news container”, similar to a newspaper or magazine, a relic of the past or is it still associated with quality journalism? In an era of instant information, is it worth proposing a self-contained, stop-motion shot of the news cycle?

For some, the reflexive answer involves market research, readers samplings and the like. I don’t think so. I’d rather abide by one of Steve Jobs’ sayings:

“It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.”

He was only referring to electronic devices and the software that powers them, all being complicated indeed. But great news products have yet to be invented, and developing them can be quite involved, too: they combine interface design, contents structures and… technology (the latter’s importance being largely underestimated by legacy medias).

First of all, a matter of definition. By “encapsulated edition” I mean a decisive evolution away from the Zinio-like PDF replica of the paper product. Some publications have added XML layers that considerably improve the reading experience and allow numerous features — creating files, sharing on social medias. But very few are willing to get rid of the PDF’s bulkiness (for more on the subject, read a recent Monday Note Tear down this PDF). For “PDF-shovel” editions, the result is unsatisfactory: broadsheet newspapers that are six times larger than an iPad screen, 80-pages magazines loaded with ads that you must painstakingly leaf through.

Certainly not the right template for the future.

On the other hand, BloombergBusinessweek+ looks like a good start. I’m a long time reader of BusinessWeek magazine (when it belonged to McGraw Hill, before Bloomberg bought for a few million dollars). Then, last March, Bloomberg launched the weekly’s digital edition. I was curious to see how the switch to digital would look like.

Today, after a few dozens issues, let’s see what makes “BBW+” a great digital encapsulated product.

#1:  Investment in Design. BBW+ obviously gives design a great deal of thought, both in terms of graphics and structure.

Today’s web is plagued by cheap design. Many sites, especially in the tech field, use stock photographs or copyright-free Flickr pics ad nauseam, quickly messed with by some enslaved intern. No such thing is allowed in an app. And BBW invested a lot in graphic design for both print and the digital products. The short video introducing every issue usually features the editor, Josh Tyrangiel, and the creative director, Richard Turley, or Robert Vargas, the art director, as they explain their cover story choices for the two versions of the magazine. (See examples in Coverjunkie, a good graphic design blog). No stock photos in BBW+: most pictures are produced on spec, and it screams. As for infographics, they are redesigned for the digital version. Read More »

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How Bad Boards Kill Companies: HP

September 25, 2011 – 8:58 pm | Edited by Jean-Louis Gassée

‘A good Board can’t make a company, but a bad one will inevitably kill it.‘ Thus spake Barry Weinman, the Gentleman Capitalist, when I joined the VC brotherhood. He meant to tell me to watch out for co-investors on the Board of companies in our portfolio of investments. And he was right. We, Vulture Capitalists, are supposed to be ruthless, but, in fact, we’re toothless. We see trouble ahead, but we dither, we squabble and only make the hard decisions when the damage is done.

While early-stage companies are especially fragile, one would hope mature ones, having survived childhood diseases, are less vulnerable to the Bad Board malady. But no, for a large company, a dysfunctional Board of Directors can be just as toxic as a divided investor syndicate is for a startup. We have two Valley icons to prove it: Yahoo! and HP.

Last week, Yahoo! unceremoniously ejected its 3-year CEO, Carol Bartz, who promptly and publicly questioned its Chairman manhood and called the Board a bunch of doofuses. Wisely, Roy Bostock, the Chairman in question refused to take the bait. Bartz calmed down. And “not-for-sale” Yahoo! directors and temp CEO wrote the troops, urging them to keep up the good work — while they’re caucusing with investment bankers for a sale. Whole, or one limb at a time.
Here’s a short sample of the message Yahoo! co-founders and Chairman hope will motivate the troops:

“What Yahoo! needs to do better — and we’ve talked about this — is accelerate innovation, reignite inspiration, and give our users what they want now…”

Gee, thanks. Let’s accelerate innovation, the troops repeat in unison. How come we didn’t think of it before. All Things D’s Kara Swisher gives the full and rightful savage treatment to the lame messages from the top. Read More »

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The (Overly Personal) Litmus Test

September 18, 2011 – 7:44 pm | Edited by Frédéric Filloux

Over the past three weeks, I’ve been followed. By advertising. Like many, week after week, I land on dozens of sites. Some visits originate from my set of bookmarks, others from the usual click hopping that defines internet serendipity.
In numerous instances, I get the same ad in different formats. The advertiser is called Litmus. I’m testing it. Since it sounds like a good product, I’m happy to link to it. Litmus is owned by Salted Services Inc., a Cambridge, Massachusetts company founded in 2005. It specializes in mass emailing analytics and optimization. You send it a test email, it previews your layout in numerous mail readers, flags any rendering issue, measures its ability to go through spam filters (a publisher’s nightmare for legit newsletters) and provides incredible analytics. (In the Monday Note’s case, these analytics are extremely encouraging and a good incentive for Jean-Louis Gassée and I to continue ruining our weekends.)

I’ve been testing Litmus for three weeks now, on advice from my friend Kim Gjerstad, a great WordPress and emailing specialist.  Now, Litmus wants me as a regular customer, and they are stalking me all over the web. Fair enough. How do they do it?  They — in fact, the digital marketing firm they hired — installed tracking devices in my computer. Since I subscribed to their service and since I’m professionally transparent on the internet, Litmus has been able to reconstruct my complete profile. Therefore, each time I visit one of its thousands of affiliates, the site will identify me as a potential Litmus customer and serve me the right ad. (As I write this, I discover I’m also targeted by Litmus competitors — some internet marketing arms merchant is making money on all sides).

After a while, I realized how saturated I was with Litmus ads when my synapses (slowly, I admit) finally added-up the number of pages I saw carrying the company’s rainbow logo. At the same time (but unrelated), I noticed how my advertising environment surreptitiously changed, depending upon the “freshness” of the browser I used. On one, I never delete cookies; on another I regularly flush tracking devices. Read More »

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Windows 8: BFD — Big Forking Decision

September 18, 2011 – 7:44 pm | Edited by Jean-Louis Gassée

Whether we’re living in a post-PC world, as many think today when they look at growth rates and profits, or it’s PC-Plus, For Ever, as Microsoft’s very literate chief ideologue staunchly maintains, it doesn’t really matter. When the Redmond giant comes up with a new version of Windows, it’s a Big Festive Deal that will impact the lives of hundreds of millions of PC users, and twist the fates of PC makers and application developers.

This year’s festive occasion was the Build conference held last week in Anaheim, California, where Microsoft revealed “Windows reimagined”, a.k.a. Windows 8. If you have the time and inclination, you can watch the keynote sessions and download the Developer Preview, which I did. (See Lifehacker for tips on how to install Windows 8 on a virtual machine. They worked for this accident-prone user.)

For this long-time Windows user, two things stick out:

  • The innovative Metro UI and its “have your cake and eat it” coexistence with the more traditional Windows look.
  • More important, the forking of apps on the ARM version of Win 8.

The Metro UI, a close relative of the elegant and justly-praised Windows Phone 7 UI, welcomes you when you log in:

The idea is to present a “touch ready”, customizable set of tiles that address our favorite everyday activities. The Metro UI is a step along the “Windows Everywhere” road that leads to a single, elegant UI for all Microsoft-powered devices, whether they’re PCs, smartphones, or tablets. (I know…Microsoft isn’t keen on using the “T” word. As Frank Shaw tells us, they’re “companion devices” that surround the center stage PC.)

Touch the Desktop tile and…

…the familiar Windows UI is back…but this time with a Ribbon, the same feature that was introduced with Office 2007 and that figured more prominently — some say intrusively — in Office 2010 applications.

You might see this mix of new and old as a lack of coherence, a clash of UI models.

Personally, I perceive it as keeping with Microsoft’s traditional incremental approach: Never break with the past, introduce new features while keeping a strong link with what users and developers already know. Read More »

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The Blogosphere’s Soft Corruption

September 11, 2011 – 7:18 pm | Edited by Frédéric Filloux

The TechCrunch / Arrington saga is the perfect illustration for the stealthy corruption plaguing digital information. Skip this paragraph if you know the story. In a nutshell: on September 1st,  Michael Arrington, founder of the site TechCrunch, announced the launch of a venture fund (Fortune broke the story). Rather small token by Silicon Valley standards: $20 million (to put things in perspective, according to the National Venture Capital Association, 37 funds raised a total of $2.7 billion in Q2 2011, which gives an average of $72 million per fund). No big deal, except Arrington is also TechCrunch’s editor and he intends to continue writing about startups — startups his venture would fund. (To make things even weirder, one of the main contributors to the fund is AOL, TechCrunch’s owner since last year).

Even the most twisted ethicist would have detected a looming conflict of interest. Not Arrington. Because he is one of most arrogant pricks in this business. And because he lives elsewhere. He resides in the blogosphere, where the simplest ethical issues are distorted like space-time at the edge of the universe.
Back on Earth, a controversy erupted. The loudest shot was fired by Kara Swisher, the co-executive editor (along with Walter Mossberg) of All Things Digital, the Wall Street Journal Digital Technology site.

I can’t help but sharing with you the first graf of her 6:00am (Pacific) outburst:

Of course I have something to say about the news yesterday that AOL would be a key investor in a new early-stage venture fund being started by TechCrunch’s perpetually petulant editor Michael Arrington — with a big, fat and decidedly greasy assist from a panoply of Silicon Valley’s most powerful VC firms and angel investors.

As Alfred Hitchcock said, it starts with an earthquake and it’s getting worse. Then, she summed up :

In fact, the creation of a $20 million investment kitty that Arrington has dubbed CrunchFund is simply the formalization of a long-standing arrangement that has already been going on since he founded his popular tech blog.

Eventually, after a public, web-enhanced, dispute with his owner, Michael Arrington was fired. (On the matter, New York Times’ media columnist David Carr wrote the best piece, as usual, well-crafted and documented).

Now, here is why I find this subject interesting. Three things: the revolving door between journalism and industry; the blogosphere distortion field; the pervasive conflict of interest.

The switch. For one, I have nothing against switching from journalism to another kind of activity. In that respect, I disagree with most of my fellow journalists – especially those in France who like to believe journalism is an apostolate (both come with a vow of poverty.) Last week, I met a former London-based business reporter, who is now back in France; he is being offered a top communication job in a Fortune 500 company. He feared being marked with the seal of infamy and no longer allowed to come back as a journalist. I told him things have changed; after five years or so as a communication guy for a large conglomerate, a business news organization would be even more interested in hiring him because he would know his sector pretty well, and would be able to detect all the manipulation tricks of big corporate PR machines, which could be invaluable to his junior co-workers.

As for someone writing about startups, I find it perfectly understandable the desire to cross the Rubicon and to join or create a venture fund. Trying to detect what could be a great product or even the Next Big Thing, nurturing great teams of engineers, designers or marketers, is an enthralling occupation, which, in addition, is both intellectually stimulating and financially rewarding.

Unfortunately, Arrington doesn’t see things that way. He got drunk in a kind of power game, intoxicated with his supposed “make or break” power over startups. (By the way, I always found the alleged power of tech writers over the fate of a startup to be vastly overstated; unlike in the analog era, the disintermediated world allows every product to find its path to success – as long as it deserves one.)  Anyway: I do find the revolving door is a good thing. As long as the previous door has been properly locked.

Enter the blogosphere and its tolerance for conflicts of interest and — let’s use the word – soft corruption.

Ten years ago, Arrington’s case would have been a no-brainer. Neither for him or his employer. He would have simply been let go. Now, it seems to trigger a quarrel between Ancient and Modern, the former being – obviously – representatives of the old medias, the likes of the Swishers and the (David) Carrs and the latter being the tech blogosphere and is elastic value-system. Fine.

I’m not going to denigrate the blogosphere as a whole or TechCrunch itself, which harbors good reporters. Blogs are part of my daily media routine and, for the record, I’ll say many bloggers do a better job than presumed professional writers. Still, by construction, bloggers are more prone to serve third party agendas: many are penniless, young, untrained, unsupervised and their writing is unedited. A target of choice for manipulation.

A couple of years ago, I witness firsthand the blogosphere’s vulnerability. I was called by a non-profit organization to take a look at their digital strategy (I can’t be too specific, I’m still under NDA). The whole things was in the hands of a couple of communication agencies, which had detected a gold mine, loading the project with outrageously overpriced services. I pissed them off quite a bit by donning a bean-counter’s suit — which I found, in that case, enjoyable – and by suggesting many budget cuts. (When done, I quickly moved away from that fishy mission).
One of the promotional tools proposed by the flacks, was dubbed as “The Blogger Army”. In short, a few hundred bloggers worldwide, presented as “influencers” that would convey pre-packaged messages concocted by the communication agencies. The bloggers didn’t have to care about the product or its underlying value, they just had to cut and paste the material they were provided with. All of the above for a $100,000 budget paid to a firm specialized in deploying the “army” — including a couple of well-know “influencers”.
That very same year, as I dug a bit further, I realized how many bloggers are deluged with gifts from the tech industry and how, to that crowd, the notion of flashing a Visa card to pay for gadgetry was seen as utterly ridiculous…

In the information business, the conflict of interest is looming at every corner. All the time, someone is trying to buy you with something. It could be a product, “exclusive” access, the transcript of legal depositions, a heads-up to a report. Everything. The more vulnerable (or hungry, or ambitious) a writer is, the better target he’ll be for the corrupters. Years ago, as I was writing about Hollywood, a writer from The Los Angeles Times explained how an interview with an agent or a movie producer often ended up with a cajoling “… And what about you my friend, you must have a script buried somewhere, hmmm? Let’s discuss it someday…”

That’s why, when it comes to get an credible review of a tech product or service, I’ll trust Walt Mossberg’s Personal Technology column much more than any blogger.  Mossberg is a seasoned professional (he’s 63) who had developed his craft well before the tech boom. He actually sharpened his claws covering the brutal automobile industry, as recounted is this 2004 Wired profile. Mossberg lives by his reputation of independence, that’s why the Wall Street Journal (and AllThingsD) consider him as an important asset – and pays him accordingly. I took him as an example because I’ve been reading his column since he started it in 1991 (I was then living in New York).

His 1000 words ethics statement is an example of what should be the standard in journalism. Many news organizations, newspapers, magazines, websites, have adopted similar codes. Are they foolproof? No, certainly not. But it is worth considering having one.

— frederic.filloux@mondaynote.com

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Crazy Patent Wars

September 11, 2011 – 7:18 pm | Edited by Jean-Louis Gassée

Every week we see more companies filing more lawsuits over patents. Microsoft and Oracle sue Google, Apple sues a long list of companies…and they all countersue in a new kind of circular firing squad, a real MAD (Mutually Assured Destruction) conflagration. Soon, high-tech companies will have more lawyers than engineers.

First, a word on the general topic of patents. Feast your eyes on this Wikipedia article and you’ll see that patents, those erstwhile royal decrees, have been around for a long time. In theory, they’re supposed to foster innovation by granting the inventor a monopoly on an original process. In reality, things get complicated. Byzantine patent law has created lifetime employment opportunities for those who are expert in the Talmudic parsing of what is actually, legally patentable.

Back in the tangible, “real-world” days, you could invent a new process to temper steel that would result in taller, safer buildings. In patenting your idea, you’d earn a bit for yourself and encourage others to raise the bar.

Since then, we’ve invented software and, according to some critics, including at least one Nobel Laureate, we made the terrible mistake of allowing patents on these “inventions”. Can you really patent any algorithm, even a simple one, or only those that are complicated and “non-obvious”? What about the program code that realizes the abstract algorithm? And what do you call the formal language used to create an unequivocal description of the algorithm? Just text or a program?

It’s messy. But the mess isn’t new, it’s been with us for decades.

What’s new is the smartphone. A closer look at its complexity and profitability will provide a simple(r) explanation for the new madness.

First, the complexity. I’m one of those who like to call smartphones the Really Personal Computers. This could be misleading as it implies that these ubiquitous devices are like PCs, only smaller. In reality, a smartphone is much more complicated than a PC: accelerometer, gyroscope, compass, two cameras, multiple radios (Wi-Fi flavors, Bluetooth, multi-band cellular radio/modem), light sensor, humidity sensor, capacitive touch screen… All this in one very small and resilient package.

Most of today’s PCs aren’t nearly that complicated, they have fewer “sensory organs”, form factor size is barely an issue. The smartphone, with its richness, complexity, and miniaturization, has required more, newer, smarter inventions…and has spawned many more patents than a PC.

Second, the money. Take a look at the iPhone’s slice of Apple’s income pie. This year, iPhones (and its iOS siblings, the iPod Touch and the iPad) will yield about 65% of Apple’s approximately $100B revenue. See this Asymco chart for Apple’s most recent quarter:

Furthermore, while Apple’s overall Operating Margin hovers around 40%, the number is significantly higher — upwards of 60% — for iPhones. A mere four years ago, as the chart shows, there were no iPhone billions — zero — Apple was just Macs and iPods.

The Android ecosystem has similarly high stakes. Android devices can’t boast Apple’s Operating Margin, but they make it up in volume – unit sales are much larger than Apple. Add Nokia and RIM and you get an industry that will ship an estimated 475M smartphones this year (see Brian Hall’s post), and growing fast.

That’s a lot of phones, a lot of innovation, and a lot of money. And a lot of money has already changed hands in the smartphone patent wars. In 2006, after years of sometimes dirty pool, RIM agreed to pay NTP, an intellectual property company (a.k.a patent troll), the nice sum of $612M for “full and final settlement of all claims”. More recently, in a little-heralded settlement, Stephen Elop, Nokia’s CEO-for-now, pronounced himself “very pleased to have Apple join the growing number of Nokia licensees.” The unsubstantiated whisper was $600M.
Speaking of those $600M, we didn’t hear David Drummond criticize Nokia for “extorting” Apple. You know, the David Drummond, Google’s Chief Legal Officer, who penned a whiny blog post titled “When patents attack Android”. This was right on the heels of Google’s loss in the auction for Nortel’s patents. It’s rather ironic when considering Google’s fortunes depend on key patents from Stanford, and Applied Semantics for AdSense.
And now, Google buys a patent, turns around and sells it to HTC who promptly uses it to sue Apple, the precise kind of dirty maneuver Drummond shed crocodile tears over. See Philip Elmer-Dewitt choice words: Google gets its hands dirty…

Today, there are about 5 billion cell phone subscriptions in the world, about 30% of which are smartphones (also from Asymco):

The smartphone industry has billions of devices and hundreds of billions of dollars in its future.

Imagine the throng of patent holders trying to extract royalties from each of these smartphones. For reference, Microsoft is rumored to get about $5 in royalties on each Android phone made by HTC and others (which leads to the ironic situation in which the Redmond company makes more money from Android than from its own Windows 7 Phone platform. Hopefully, when the MicroNokia agreement kicks in, this will change).

More patentable content per device, more devices, huge revenue and profit numbers at stake… No wonder the knives — and the attorneys — come out. See this detailed, well-written NPR story on patent trolls. After mentioning the $4.5B Nortel patent portfolio purchase by a consortium of companies including RIM, Microsoft, and Apple, the article concludes:

“The big companies — Google, Apple, Microsoft — will probably survive. The likely casualties are the companies out there now that no one’s ever heard of that could one day take their place.”

Can we reform this? Should we? No. Band-aids such as the recently-passed First To File reformette won’t quench appetites, nor will it put leg irons on the trolls. Instead, we should rejoice and look at the current agitation as an unavoidable side-effect of the smartphone ecosystem’s prosperity. A robust organism will always attract a number of parasites – pardon – symbionts.

Consider this false legend: In 1899, Charles Duell, Director of the US Patent and Trademark Office, is supposed to have said ‘Everything that can be invented has been invented’. We know this was wrong then, and it’s wrong now. If you think that large companies have a monopoly on invention, you forget how today’s giants — Google, Apple, Microsoft — toppled their elders: By imagining the unimaginable, patenting the unpatented.

— JLG@mondaynote.com

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