Dana Blankenhorn

Apple: What to Worry About, and Not Worry About

Tim Cook taught Apple to play a long game.

Cook became CEO in 2011 on the heels of the iPhone revolution. By turning a PC into a handheld device, as I wrote about 20 years earlier in “A Guide to Field Computing,” Steve Jobs’ Apple changed the way we live.

Cook doesn’t roll sell revolution. He sells evolution. Turning Apple into a Cloud Czar was evolutionary, being built on an existing services business. The Apple Watch was the same, built on an existing health business. Both efforts were widely ridiculed. Services are now a $40 billion/year business, wearables lilke the Watch an $18 billion/year business.

So the $3,500 Vision Pro headset doesn’t have to be huge out of the box. It can be an executive toy, used for going to the NBA Finals from Dubai, or delivering multi-million dollar presentations to a single executive decision maker. Apple can build the business organically, letting tenants experience a newly built building or showing doctors how to do an operation with the DaVinci robot.

Economic Precipice

Today is the calm before an economic storm.

The Federal Reserve is hiking interest rates to slow inflation. Many commodity prices are already coming down. But if it hikes too fast, economic activity will slow and that will be a recession.

To Nouriel Roubini (right), the economist known as “Dr. Doom,” a recession at this time could quickly become a depression, because public debt remains at historically high levels. If you owe $43 trillion at 1%, it costs $430 billion to carry it for a year. At 3%, it’s $1.3 trillion. Your budget just got broken. That’s his reasoning.

But debt owed to yourself isn’t real. We can print that $1.3 trillion. The risk then is that the dollar falls off a cliff. That’s not happening. If anything, the dollar is too strong. We’re importing deflation. Every western nation, and China, has massive debts.

It’s why the doomsayers were wrong in 2009, and again in 2020. It’s why we couldn’t fight the Trump tax cuts. They didn’t create inflation. They didn’t sink the dollar.

The Medical Oilpatch

One of the first business stories I covered was the Houston oilpatch, in the late 1970s.

The oilpatch, or the oil exploration industry, has always lived in a boom-and-bust cycle. When I was in my early 20s it boomed, and so did Houston. We were Dubai before Dubai was cool. Then prices busted in 1981 and the city followed.

The oilpatch had another boom early in this decade, with the rise of fracking. The idea is credited to George Mitchell, a man I interviewed while at the Houston Business Journal, and involves shooting water, sand and chemicals down a wellhead to break apart the rock, allowing oil and gas to seep out of the new cracks.

Round Two of the Copyright Wars

Think of this as Volume 17, Number 13 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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I have been following the copyright wars since their inception, in 1997. I watched the passage of the Digital Millenium Copyright Act (DMCA) in 1998, and the No Electronic Theft Act.

Both had a similar aim, to keep people from stealing making and re-selling copies of material subject to copyright, now that technology allowed for clean (or nearly clean) copies.

My sympathies here are purely with the Electronic Frontier Foundation (EFF) and blogs like Boingboing, which hate these laws as attacks on freedom of speech, of association, and the free exchange of ideas.

Graphene and the Nature of Change

Think of this as Volume 17, Number 9 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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Change can be slow, and change can be sudden.

Those who practice the theory of “oh noes,” the idea that it's all about to go pear-shaped, either see slow change that can't be undone, or a sudden change that others see as unlikely.

The people I meet on Seekingalpha.com, the ones who are certain that we're about to go into another Great Depression, believe in sudden change. Those who talk about climate change tend to see slow change that can't be undone.

But most of the time, disaster does not strike. And sudden change can be good as well as bad.

This is one of the great things about being a science reporter, the idea that someone, somewhere, might suddenly come up with a mighty idea, one that will drive out big problems at a stroke.

Caesar Was the Bad Man

I come to bury Caesar, not to praise him.

Mark Antony's funeral oration in Julius Caesar (whoever wrote it) is one of the great speeches in all of literature. It's designed to twist a crowd against their best interests, to win them to an empire against the republic, by laying a great man's acts for the common weal against the mere “principles” espoused by Brutus and Caesar's other killers.

Julius Caesar was the villain. Antony's speech is a lie. The tragedy of the play is the destruction of democracy at the hands of Antony and Octavius, who would become Caesar Augustus.

So now let me come to the late Steve Jobs, and patents. 

Apple's latest patent, and the words of Jobs in his autobiography, make clear that his corporate aim is to own the smartphone market, through the legal system, for as long as demand for smartphones exists. What Microsoft took from him, through Windows, he bent his last energy to overthrow by having all Android phones ruled illegal, by taking them from the marketplace.

It's a direct assault against the heart of open source. And, I believe, a direct assault against the intent of patent and copyright.

Diminishing Patent Returns in Age of Software

Florian Mueller feels like he's in his glory.

Lawyers from Apple have been on a global winning streak against Samsung's Galaxy tablet. The latest win came in Australia, where a judge stopped the product's import over a patent personally filed by the late Steve Jobs. 

To Florian this is a really big deal.

After today's decision, I believe no company in the industry be able to launch any new Android-based touchscreen product in Australia anytime soon without incurring a high risk of another interim injunction. The two patents on which today's ruling is based aren't Galaxy Tab 10.1-specific at all. They will affect all Android-based smartphones and tablet computers, across all vendors.

If Apple wins the Australian case at the end of the main proceeding, all Android-based products will effectively be shut out of the Australian market forever, unless Google or its device maker partners settle with Apple.

Bunk.

Hope For Open Amid the Ruins

These are tough times to be for open source.

Patent and copyright extremists are wrecking havoc, from technology markets forced to pay patent trolls and giant companies grabbing rights to the future through patents with absurd claims, to Europe extending copyright to 70 years in the name of a few living artists (and their long-dead managers).

But there continues to be ample evidence that copyright and patents need not strangle the future, and folks putting money behind the idea.

The UK's decision to ignore the extremists who put royalties into the European Interoperability Framework, insisting on Royalty Free standards for the goods they procure  is a little marker on the road.

Sure, it's entirely self-serving – governments strapped for cash don't want to pay the patent ransom – but if governments shouldn't be force do do so, what about the rest of us?

Who Will Make the Mozilla Phone?

That's the key question here  and the answer is, probably no one.

Android was a Linux, backed by Google. Their problems weren't with the operating system. In theory a mobile Internet client should be no different than a desktop Linux. But every aspect of the design for any “smart phone” – from how it takes calls, to the user interface, to the way apps interact – is covered by literally hundreds of patents.

• Some are held by giant companies which use them to pry open markets.

• Some are held by “development companies” like Interdigital, who research, invent and patent things for a living. (Interdigital invented one of the first digital encoding schemes, TDMA, back in the day.)

• Others are held by trolls like Lodsys, law firms that pick up minor claims at the patent office, expand them into grand conspiracies, then hold up every company in the mobile ecosystem for big gobs of cash.

You can't invent a way around these patents. If the present patent-and-copyright regime were in place at the dawn of the PC age, I'm sure we'd all still be driving IBMs with twin floppies.

Software patents are bad law for two main reasons.

1. They give lawyers an excuse to file their own private taxes on any innovator, slowing innovation, eventually slowing it to a crawl. Meanwhile nations without such court-created regimes, like China, are free to innovate all they want and run rings around us.

2. You can't invent your way around these patents, unlike drug patents, which specify compounds, or device patents, which are published so rivals can improve them. Patents granted on concepts don't have to show an actual invention. They don't have to publish the code. Which means you can't do the same thing, or something similar, in some other way. You can't patent a new mousetrap if someone has already patented the trapping of mice. You have an absolute monopoly on an entire industry that last for 20 years or more.

The Google Party

The patent fight over Android is leading to an inescapable conclusion.

Google has a business problem that demands a political solution.

The problem here is software patents. More precisely, business method patents encoded in software.

Ever since the State Street case of 1998 it's been open season for patenting business methods through software.

Before State Street, software patents were highly limited. You had to tie the patent claim to a particular device. Software might control a patented machine, but it was the machine that was patented, not the software. Certainly not what the machine did.

State Street changed this. By making methods of doing business subject to patent, all someone had to do was implement a business method through software and run to the patent office. This was made worse by the normal patent game of getting narrow protections through the patent office, then making broad claims for those patents in court.

That's what has happened to Android. Just about anything you could do in a smartphone has been patented. It doesn't matter that the Android design is based on Linux. In fact, Microsoft claims it has patents on Linux, which was created in the early 1990s out of Unix, a technology from the 1960s.

What has changed and why this matters can be seen by looking at a business that is very much pro-patent and built on patents, medicine.