The Meaningless WiMax Patent Pool

from the somebody's-missing.... dept

There are some folks who believe that the solution to patent problems is to just have everyone who claims to have a patent on a certain technology throw it into a "patent pool" and then those who use the technology pay up a fee that gets divided up among pool members. It sounds nice, but in practice, it almost never works. Setting up a patent pool actually encourages the wrong behavior: it encourages plenty of other patent holders to claim they deserve to be a part of the pool, and if they're not included, they start suing like crazy. Also, it encourages companies to try to get any kind of patent that might get them included in a pool, leading to all sorts of crazy claims. It's the exact opposite of the type of behavior that should be encouraged.

So, don't read too much into the fact that a bunch of companies in the WiMax space have agreed to put together a patent pool under the amusingly inaccurately named "Open Patent Alliance." The companies involved, Cisco, Intel, Samsung, Sprint, Alcatel-Lucent, and Clearwire are all betting big on WiMax deployments, so they know it's in their best interest to get the licensing out of the way. But you'll notice that there are a lot of companies missing -- including Wi-LAN who has been claiming that it owns all the key patents over WiMax technology for years. The patent pool sounds nice, but it's certainly not going to diminish the number of patent lawsuits that arise over WiMax technology. If anything, it's just going to make all those other companies even angrier.

Filed Under: patent pools, wimax
Companies: alcatel-lucent, cisco, clearwire, intel, samsung, sprint, wi-lan

iPhone Shows That Cheaper Phones Are Still Important

from the price-is-important dept

The iPhone has received plenty of well-deserved (and plenty of not-so-well-deserved) hype and press over the past year or so, but one of the key points that Apple tried to make when it launched was that a premium phone deserved a premium price -- and people would pay for it, even without a massive subsidy from a mobile operator, as is typical of other phones. And, while there definitely was a huge crush of Apple fans who had to buy the iPhone early, the fact that Steve Jobs quickly lopped $200 off the price, just months after it was introduced, suggested that the number of people willing to pay that kind of premium wasn't as much as expected. In today's keynote, as was widely predicted, Jobs launched the new 3G iPhones with another $200 cut off the price, so the base model with 8gigs is now $199 -- down into the range of your typical subsidized smartphone.

While the iPhone has done plenty to get people to rethink mobile interfaces, it seems clear that Apple may have initially misjudged how people would respond to premium-priced phones. Jobs had promised 10 million iPhones sold in the first 18 months, and has reached about 5 million in the first 12 months (nothing to sneeze at, obviously). However, to get up to that 10 million number, he had to drop the price to be competitive with other phones. It's a smart move (though, it's not clear if the $199 is subsidized or not), given the market conditions, but beyond the lessons that everyone will talk about concerning Steve Jobs' strategy in launching the iPhone, the most interesting of all may be how the initial pricing structure backfired -- but was changed so quickly.

Filed Under: iphones, pricing, steve jobs, strategy
Companies: apple

T-Mobile Sues Starbucks For Over Eager Switch To Free WiFi

from the that-wasn't-what-we-bargained-for... dept

Back in February, Starbucks surprised an awful lot of people by signing up to use AT&T's WiFi offering, ending the exclusive deal it had for many, many years with T-Mobile (and Mobilestar before T-Mobile purchased that company). Part of the AT&T deal was that it would offer some amount of free WiFi -- something T-Mobile/Starbucks never did. There was some early confusion about the deal concerning whether T-Mobile would continue offering service and how the two services would overlap. It turns out that it wasn't just confusing to us reading about it -- it was confusing to T-Mobile as well.

T-Mobile has now sued Starbucks over the transition, saying that the company has gone well beyond what the two companies had agreed to. The original plan was that T-Mobile would gradually transition the network to AT&T, and the companies would work together to make sure things worked well for customers of each company. However, just recently, Starbucks pushed forward with the plan to offer some number of "free" WiFi hours to AT&T customers -- much to the annoyance of T-Mobile, who says most of the WiFi equipment in use is still T-Mobile's, and the company isn't getting paid at all for the free hours (an interesting question could be whether or not AT&T is getting paid for that usage).

Basically, the infrastructure transition has barely begun, and Starbucks is already acting as though it's complete, shifting over to the business model provided by AT&T, without having that work within the parameters of T-Mobile's model. While the legal result will almost certainly come down to contractual terms, the real issue may be that this suggests the promised "smooth transition" from T-Mobile to AT&T may not be very smooth at all. T-Mobile is going to have less and less incentive to make sure that the network really works all that well, especially if it feels that it's being cheated out of money for the use of its network.

Filed Under: contracts, wifi
Companies: at&t, starbucks, t-mobile