Apple Inc accused Nokia of anti-competitive practices and patent infringement on Friday, escalating a legal battle as they fight for market share in smartphones.

Analysts say the dispute, potentially involving hundreds of millions of dollars in annual royalties, reflects the shifting balance of power in the mobile industry as cellphones morph into handheld computers that can play video games and surf the Web.

Apple, which makes the iPhone and iPod, was responding to a suit that arch-rival Nokia filed in October. That suit accused Apple of infringing 10 Nokia patents for technologies such as wireless data, speech coding and security.

The countersuit heats up the fight between a rapidly growing Apple and the world’s largest maker of cellphones. While relative newcomer Apple trails Nokia in cellphone shipments, its iPhone has gained a lot of ground against the market leader in the smartphone segment.

Apple, which entered the industry in mid-2007, overtook Nokia last quarter as the cellphone maker generating the highest total operating profit.

“History is littered with industry incumbents being surprised by newcomers since established players often fail to deliver customer value beyond the basic utility of their initial products,” said Steven Nathasingh, chief executive of researcher Vaxa Inc.

“Apple has bedazzled Nokia and others like Sony by redefining all things mobile and making it generationally stylish. A combination that is hard to beat,” he said.

Analysts say Nokia and Apple could take years to resolve their patent dispute.

In court documents, Apple denied infringing the Nokia patents. It said the patents asserted by Nokia were not essential for technology standards used in cellphones. The countersuit was filed in the same Delaware court where Nokia brought its case, Apple said.

SHADES OF MOTOROLA

Since Motorola Inc launched a similar attack on Nokia in 1989, the Finnish company has built one of the industry’s widest patent portfolios. Only Ericsson and Qualcomm have comparable portfolios.

About 40 companies have entered into license agreements with Helsinki-based Nokia, including virtually all the leading handset vendors — except Apple.

Apple said that Nokia had engaged in anti-competitive behavior and did not live up to commitments to license its own technology at fair and reasonable terms.

According to Apple’s complaint, Nokia and Apple began licensing negotiations in late 2007 related to certain Nokia wireless communications patents.

In subsequent years, Apple said, Nokia boosted royalty rates for the patents to as much as three times higher than what was previously proposed and demanded that Apple grant Nokia a license to certain of its patents as part of the compensation.

“Other companies must compete with us by inventing their own technologies, not just by stealing ours,” Bruce Sewell, Apple’s General Counsel, said in a statement.

Jeffrey Faucette, Vice Chair of Howard Rice Nemerovski Canady Falk & Rabkin’s Intellectual Property litigation department, said the two may have sharply differing views about whose technology is central to the iPhone.

“In the old perspective, you’d say the piece that lets you make calls is the most valuable, so you’d get a license fee that’s commensurate with that,” Faucette said.

“Now you look at the iPhone, it’s hard to say specifically what that device is for. It changes daily and hourly depending on what the newest app is that people are crazy about.”

The 13 patents Apple cited in its countersuit involve various computing technologies including graphical interfaces, teleconferencing, power conservation and touch screen technologies — features popularized by its iPhone.

Apple cited Nokia’s E71, sold by AT&T Inc, and its new top-end N900 model as products that infringe its patents.

In response, Nokia said the countersuit does not change anything fundamental in the original case, but noted that it would take time to study the suit.

“They have infringed our patents since the iPhone launch in 2007,” a Nokia spokesman said.

Apple shares were down 1 percent at $194.67 on Nasdaq. Nokia’s US shares were up 1.4 percent at $12.73.

While the battle may drag on, analysts see the companies eventually coming to a licensing agreement.

“We can now look forward to a lengthy tit-for-tat exchange between Apple and Nokia as they grind out a deal,” said Ben Wood, research director at CCS Insight.

source : Reuters – Saturday, December 12

SINGAPORE : MobileOne (M1) has broken SingTel’s monopoly of the Apple iPhone market in Singapore.

M1 on Tuesday said it has secured a deal with the US computer giant Apple to sell the iPhone in the city. But details on pricing and when the handsets will be released will come later.

If one wants to buy an Apple iPhone now, one can only choose SingTel. But that will change when M1 starts selling its own iPhone handsets.

Analysts said the iPhone could help M1 reduce its customer churn, or the rate at which it loses customers over a specific time period.

Ng Kian Teck, research associate, SIAS Research, said: “M1 is taking on the younger crowd, and the iPhone is something that the crowd is looking forward to. And this will lower its churn rate.

“At least for the last one year, quite a substantial portion of customers are being lost to SingTel because of the lack of the iPhone service.”

He added that M1’s current churn rate is about 1.5, compared to 1.2 for the other two mobile operators.

Meanwhile, some consumers have welcomed the news.

Business development engineer Jaycee Lim, an M1 subscriber, said: “Since there is no more monopoly on the iPhone, the telcos may try to compete on the prices of their mobile phones as well as data plans. I will definitely be considering getting the iPhone when it is available, providing the price is reasonable.”

The question now is how much the M1 iPhone will cost and its data plans.

Analysts said M1 has much to do to catch up to SingTel’s 14-month lead – so this might result in cheaper rates. This will sit well with its mainly youth customer base, who are likely to have limited spending power. M1 is also likely to roll out a range of plans to allow for some flexibility.

When contacted, SingTel said it will continue to collaborate with Apple to introduce the latest products to Singapore.

A SingTel spokesman said: “SingTel is pleased to have been the first operator to bring both the iPhone and iPhone 3GS to Singapore. Coupled with our unrivalled 3G mobile network coverage and our innovative services like Live TV, our customers are enjoying a superior iPhone 3GS experience.

“We will continue to collaborate with Apple in introducing the latest products to Singapore. To date, we have put tens of thousands of iPhone 3GS in the hands of our customers. We review our price plans regularly to ensure that they offer the best value to our customers and remain competitive in the market.”

Both M1 and StarHub have been vying for the rights to sell the iPhone in Singapore. Analysts said the chances of StarHub getting its own deal now appear slim.

Mr Ng said: “The likelihood is not that high – because Apple is looking for a significant proportion of sales. So it is not possible to have too many players selling iPhones together. For example, if you want to sign a contract, you may have had to sell at least 100,000 phones.”

StarHub told Channel NewsAsia that it is still interested in bringing the iPhone to its customers.

“We are interested to bring the iPhone to StarHub customers. After all, we offer the highest mobile data network speeds and the best smart phone plans in town,” said Michael Sim, senior manager, Corporate Communications, StarHub.

Student Peggy Chang, a StarHub subscriber, said: “Of course, I am not happy that StarHub is now the only one who does not sell iPhones. When my contract expires in one year’s time, I will definitely switch providers.

“But the best scenario would be for StarHub to get the rights too, so consumers can compare prices among the telcos. I assume they will each try to offer competitive deals then.”

Some market watchers see M1’s iPhone deal as a double whammy for StarHub, which earlier this month lost its broadcast rights for the English Premier League, from the 2010 season, to SingTel.

source : CNA

Apple announced on 9 Sep 2009, that it was adding a video camera to its iPod Nano and cutting prices of its wildly popular music players.

Apple chief executive Steve Jobs unveiled the video camera-equipped iPod Nano at an Apple media event here during which he made a much-anticipated appearance on stage.

With the new addition features, now you watch your video on the Nano and you can send it to YouTube too.

Jobs, 54, went on medical leave in January and returned to work in June following a liver transplant.