Intellectual Property and the Next Wave of Computers Technological Development
Companies / Tech Stocks Nov 06, 2010 - 08:41 AM GMTBy: Phill_Tomlinson
"Microsoft is launching legal action against Motorola over its line of Android-based smartphones, claiming the manufacturer infringes a number of its patents. The lawsuit is the latest in a series of patent infringement cases being fought in the increasingly-competitive mobile market."
"The increasingly-popular Android software is also at the heart of a legal battle between Oracle and Google, while Nokia is embroiled in a long-running legal battle against Apple, and Apple is separately suing manufacturer HTC. Manufacturers have become quick off the mark in launching legal action against rivals, owing to a dynamic smartphone market across continents."
"Google and a reseller of its products have filed a lawsuit against the U.S. Department of the Interior after the agency solicited bids for cloud-based e-mail and messaging services specifying that bidders must use Microsoft products."
"Apple sues Motorola for infringing on patents related to multitouch and other access technologies in its Android smartphone lineup. Motorola had sued Apple earlier this month."
Everyday the tech news always seems to have at least one new case of some computer company suing another. With so much at stake, companies want to gain any advantage they can over their competitors. Intellectual Property is an issue that is rarely discussed. Convention states that we require IP in order for innovation to occur otherwise there would be no incentive to create new products and ideas. However its a similar fallacy to the one where governments state we need to create inflation otherwise the economy would tailspin into depression and stagnation - the opposite is in fact true. The abandonment of IP and patent laws would be a great benefit to society and on the contary would create huge amounts of innovation.
Xerox's Modern Desktop
Back in the late seventies and early eighties Xerox invented the first modern computer that we have all come familiar with. That is a computer with a mouse, keyboard and a graphical user interface. The team that came up with the concept couldn't convince the Xerox execs that it was a good idea, with them dismissing it stating devices such as the mouse would never catch on. Where Xerox couldn't see potential Apple could. Steve Jobs went over there with his lead engineers and they copied everything they saw. He realised that this was the future of computers. Bill Gates did a similar thing with Microsoft after seeing the technology, he also copied the concept. Desktop history was written.
With all the lawsuits going on regarding patenting touch gestures or even trivial operations such as email synchronisation on mobile devices can we imagine if Xerox had done the same? The desktop revolution would never have exploded as quickly as it did. Royalties would have been paid to the monopoly holder of the Patent keeping prices higher than what they should be and preventing other communities and individuals adding bells and whistles to the initial concept. Can you imagine if the person who invented electricity, cars or the jet engine had patent monopoly rights?
The idea that we need patents or IP to ensure innovation is scaremongering. Its big corporations trying to monopolise markets at the expense of society. A true free market is one where ideas are open and free to all. Choice is given to consumers. Prices are continually brought down. Quality is continually raised. Companies still have plenty of need to innovate without IP laws.
iPhone
A common misconception is that the iPhone is the most superior phone you can currently get. Of course many realise this is not the case. There are many alternatives on the rapidly rising Android platform that have better technical specifications. The reason why people perceive the iPhone to be so good (apart from the glamorous advertising) is that it was the first slick smartphone on the market. It gained early market share, a critical concept for any company. Innovation is just as likely to occur under this premise as everyone wants initial market share. Companies and individuals would innovate under their own free will. Its in humans DNA. You don't need to patent ideas that make one person rich at the expense of everyone else.
Open platforms have always been the most innovative. Telecommunications was heavily regulated up until the 1980's. The industry was a stagnant state monopoly. Then we gave it over to free enterprise and a plethora of gadgets and tools became available to us all. Companies all copied one another, putting out extras here and there as they would attempt to gain a competitive advantage over their rivals.
Libertarians agree with private property laws. For example I own a car and if someone was to take it from me then they would deprive me of the pleasure and utility of its use. Therefore the legal system should enforce physical property laws. However for an idea, why should we monopolise that? I write ideas on this blog, commentating on current events using economics and history to gain understanding of what is happening. I could charge a fee but I give it all away for free as I believe ideas should be available to all regardless of income or social status. If people read this and gain a greater understanding of events then how does that deprive me? I still have all my ideas. It's similar if hypothetically I came up with a great new way of producing electricity. Rather than sharing the idea I patent it and monopolise the idea so others can't benefit from it. If others were to use the idea how would this deprive me? I still have my original idea and can benefit from it. Others should also be able to benefit from it. In open systems someone may build upon my original idea and make it better. Now I can use their innovation for my own benefit. Innovation builds upon one another enhancing our capital structure.
Innovation is a human instinct. We all are naturally lazy, trying to think of ways to do things more efficiently. Sharing our discoveries greatly improves all our well being.
Computers next Big Cycle
I used the recent news of the various large computer firms suing each other as we are currently embarking on the next wave of innovation in computers. Like economics, the computer industry also works in cycles.
- Humans to Mainframes
- 1956 - 1966 (Innovation and Growth), 1966 - 1976 (Refinement)
- Mainframes to Desktops
- 1976 - 1984 (Innovation and Growth), 1984 - 1992 (Refinement)
- Isolated computers to networked computers
- 1992 - 2000 (Innovation and Growth), 2000 - 2008 (Refinement)
- Computers everywhere
- 2008 - 2016 (Innovation and Growth), 2016 - 2024 (Refinement)
We are all familiar with the first three waves of computers. Mainframes used to rule the world then along came some individuals with vision such as Steve Jobs and Bill Gates (along with others) and said people are going to want their own computer. All the big mainframe players at the time dismissed the personal computer, IBM dismissed it as a toy and with that error they nearly went bust in the early 90's.
Then came the Internet. For years it had been the sole use of the military and been stagnant for years. Along came private initiative and enterprise and revolutionised the way we consume information and live. Again many dismissed the Internet. I remember first being connected during the growth phase and I thought it was brilliant, a revolutionary concept. A lot of other people I knew dismissed it and couldn't see the value, again saying it was a toy, that is until we hit the refinement stage.
We have only just entered the next new exciting phase of computers. Ubiquitous, pervasive computers, seamless to the user. Not only are they all connected but they are everywhere. In our cars, TV's, appliances, phones, all interconnected able to communicate with one another. Concepts like cloud computing are yet to really take off, but this is where we are heading. Our music, videos, news - our lives - accessible at the press of a button on any device, anywhere in the world.
Devices such as smartphones, Internet TV, iPads or Tablets are being wrongly dismissed as toys but these are the pioneering devices that will become common everywhere (they will evolve further, but the concept is there). Not only touch screens but swipe screens like the movie minority report. Phones that can read a computer in your fridge that reads RFID chips on its contents to tell you what to buy while at the supermarket. A new round of investment in computers has only just begun and with it a new way of using computers.
Remove IP
In order to excel in this new era of innovation we need to reform the IP laws and allow everyone, individuals, small organisations and the large established corporations all to innovate sharing knowledge with one another as this growth phase takes off.
Microsoft vs Google vs Apple
The big three have very different approaches to the new wave of technology. Two were spawned during the personal computer revolution while Google was established during the network phase and there are signs that Microsoft is struggling to embrace the latest wave (I think Bill Gates could see what was coming). Google are embracing open standards and open source software, they know they can't fight free markets. They have created the popular mobile platform Android and gave it away for free. Microsoft's cash cows are its OS and the Office suite. Without these incomes, Microsoft would be a great deal smaller.
Recently Microsoft has begun trying to get patent loyalties from the hardware manufactures that use Android, claiming that it infringes on Microsoft patent rights. Manufacturers pay the fee as its cheaper than a legal dispute, however it is merely delaying the inevitable. If Android was really infringing on Patent rights then why aren't Microsoft suing Google? Its because they know they don't have a case and Google would fight back, resulting in the them having no position to claim royalty fees from the manufacturers.
All of this is taking valuable business away from Microsoft in the next big market. On the desktop side, most people still believe they have a rock solid market share, but I beg to disagree. The numbers may still stack up on Microsoft's side, but not for long. The market will get them eventually.
Notebooks were once the in thing before the iPad. As they are designed to be a lightweight device many manufacturers thought rather than paying Microsoft a $50 licensing fee for each unit, why not use another OS, Linux, a free and open OS. When this happened Steve Ballmer quite literally bricked it and starting practically giving away XP licences trying again to regain the Microsoft monopoly. But all it does, like with Android, is delay the inevitable. Microsoft needs to continually sell new Operating Systems and Office products to keep the revenue coming in. As we progress through the current phase of computers the operating system will just be the container. People will use multiple OS's, interchanging seamlessly. The majority of the content will come through the web, the cloud, using standard formats read on any device. Our files. Our music. Photos. Documents. Games. People will not need to have Windows moving forward. Linux will provide more than an adequate alternative.
Google Chrome OS
The concept above is behind the soon to be released Google Operating system. It will merely be a container to control the local hardware but all the content will be online. Again like Android it is based on Linux and like Android has its source open to the public (relative of course, like their browser Chrome, Google control their official release). The price? Free. And so long as it doesn't deviate too much from the core of Linux it will be reliable, fast and secure. I believe this will open the way for other Linux distributions. If the manufacturers break from Windows once more to Linux then Windows will have problems going forward. Why pay for an OS when there is a free one that performs all the tasks and is superior? Video game lock in will only last so long, eventually that will become more open (and more orientated towards the web).
Steve Ballmer has dismissed Linux in the past as "Communist" - he really is as much of an idiot as he looks! Linux is a perfect example of free market economics. It was created by individuals all collaborating together, all sharing ideas with one another, open to everyone, controlled by no Government, Corporation or Cartel. Microsoft on the other hand used patents, and abused it power by enforcing closed standards and locking people onto its platform. Well the market always catches up with everything, its a universal law. Communist Russia, State monopolies, Government overspending - the free market always wins out. Microsoft's tight grip is slowly eroding. How can they compete with free?
Russia and China Adopting Linux
Emerging markets are going to be bigger consumers of computers going forward. Russia has recently announced it wants to create its own Linux OS to move away from Microsoft. China tells Microsoft that it likes its software, just like it tells the US government it will keep buying it bonds but on the other hand they are pushing Linux to its citizens to adopt its own version, Red Flag. Russia and China don't want to hand over income to the US as there's only so long they will be able to pirate Windows without political action. China wants to keep their trade surplus with the US and to make it as large as possible.
I think Linux will be the next big platform. It has the ultimate price point - free. It hasn't been adopted due to historic Microsoft lock in, but as uses of technology change so will peoples needs. Then the manufacturers will bundle Linux as the OS instead of Windows. Android is taking off, on mobile devices. Chrome OS I believe will be a winner eventually (although it may be slow - its ahead of its time) not just on netbooks but desktops eventually where the old magnetic hard disk will have the same fate as its 1.44" floppy cousin. People will have more choice and will not really care about the operating system they use so long as it can operate the hardware and connect to the web.
Apple, has it peaked?
The ultimate fashion accessory, iPad, iPhone, iPod, iTouch - they could bring out a brick and call it the iBrick and Steve Jobs would be able to fool people that it was special. Apple products are no more superior than Windows or Google products (I could list a lot of Apple defects, there seem to be new defects every day of late), its just they charge twice as much, have half the specification but make it look pretty. Apple are repeating the same mistakes as they did in the eighties. By not appealing on price their market share will slowly erode. I think they missed something with iOS. They should have made it open for any device. Instead they have one phone fits all, £600, the Apple ecosystem. Too expensive for many people when there are alternatives at a fraction of the cost. Apple has bugs just like Microsoft or Google. Its just Steve Jobs is a great liar.
I think Apple will have its niche. But it won't get majority market share like many think it will.
We need to radically reform the Patent laws in order to breed innovation for the good of society not to enrich individuals at the expense of the majority. This goes for many industries, Music, Pharmaceuticals, Film, TV. You can close as many Napsters as you like, but another one will take its place. Its the free market telling us that the law needs to be reformed and allow IP content to be free to all.
By Phill Tomlinson
http://theageofstupidity.blogspot.com
The Age of Stupidity "There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.", Ludwig Von Mises
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