Nokia and RIM are doing their best to demonstrate the efficacy of Darwinian selection. Allocating resources to eliminate one more hungry mouth does not sound like the optimal strategic initiative. But when your options are limited, focusing on getting rid of another weakling probably looks easier than trying to figure out how to take on the Alpha Males in the tech pack.
The problem, in this case, is that neither of the protagonists appears to have a significant advantage. Whichever is eliminated - and the rest of the world probably couldnt care less - the other will last only long enough to become fodder for one of the healthier competitors up the value chain.
Nokia's relationship with Microsoft may give it some added heft and a greater incentive to survive. If it can demonstrate the power of its patents, MSFT may be inclined to devote greater attention to its potential. RIM's battle is to generate just enough signs of life on the economic nasograph that some other entity (Chinese? Korean? Qatari?) comes along to snap up the remains and refashion them within the framework of a more sustainable enterprise.
Either way, we are reminded of bull-baiting or cock-fighting or some other brutal 19th century peasant passtime. There isnt much point beyond the entertainment inherent in watching two brutes tear each other apart, but it is sometimes satisfying to know that there are creatures whose lives are more miserable than yours. JL
Paul Taylor reports in the Financial Times:
Nokia stepped up its patent dispute with Canadian rival Research In Motion, launching lawsuits in the UK, Canada and the US seeking to enforce a Swedish arbitration ruling against RIM.
The move could prevent the Canadian BlackBerry maker from selling WiFi-enabled devices until the two companies reach an agreement over royalties
RIM claims its use of the WiFi wireless networking standard is covered by an existing licensing agreement it has with Nokia dating back to 2003. It sought arbitration in March last year after the two companies failed to reach a negotiated agreement.
“Research In Motion has worked hard to develop its leading-edge BlackBerry technology and has built an industry-leading intellectual property portfolio of its own,” the Canadian company said on Wednesday.
RIM, which, like Nokia, has seen its smartphone market share decline sharply in the face of competition from Apple’s iPhone and Android-based devices, added that it “will respond to Nokia’s petitions in due course”.
People close to the company cautioned that the arbitration ruling is unlikely to have any impact on the sale of existing BlackBerry devices – or the launch of next-generation BlackBerry 10 devices at the end of January – because Nokia still faces a potentially lengthy court fight to enforce the ruling. Most analysts believe RIM will still seek a negotiated settlement with Nokia, rather than risk a sales ban in the US, its largest market, or elsewhere.
Nokia, which has formed a close partnership with Microsoft to develop new smartphones based on the Windows Phone operating system in an effort to compete with Apple, Samsung, HTC and Google’s Motorola unit, has made no secret of its desire to increase its royalty income to help offset revenue declines in its phone business.
The Finnish company currently derives about $650m a year in revenues from its wireless patent portfolio, which experts say is one of the industry’s most extensive.
The smartphone market has been rocked by a series of patent disputes in recent years, including Apple’s successful suit against Samsung, which the Korean handset maker is challenging.
Other big patent portfolio holders include Ericsson and Qualcomm, while Google bolstered its own patent portfolio through the acquisition earlier this year of Motorola Mobility.
Nokia’s ADRs closed up 3 per cent at $3.27 on Wednesday on the New York Stock Exchange, while RIM shares, which have been particular volatile this week, made up early losses to close 3.5 per cent higher at $11.10 on the Nasdaq.
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