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Week in Review: New directions for Apple; victory for Google

Apple interested in Time Warner’s video content and home appliances, as Amazon becomes its greatest foe

The week started and ended with rumors about Apple’s next steps, as the company struggles to identify its next hit, as the smartphone market contracts and it looks over-exposed to falling iPhone growth.

First, it was reported to be preparing two significant announcements for its upcoming WWDC developer conference – an open software developers’ kit (SDK) for the voice-activated digital assistant, Siri, and a home appliance to challenge Amazon’s popular Echo. The moves indicate two important directions for Apple – a gradual opening up of its platform, risky to its traditional model and its carefully controlled user experience, but probably unavoidable; and a hardware-oriented bid for the smart home, where its strategy has so far focused on iPhone-controlled applications within HomeKit. Read Article Here

At the end of the week, Apple was again the center of rumors, this time of an interest in acquiring Time Warner. The talks are at a very preliminary stage, ‘sources’ said, but even if they come to nothing, the highlight Apple’s intensifying interest in content. As the sheen comes off its device business, it will need to be more aggressive against Google, Amazon and others in content, and in the move from downloads to streaming services. Its streamed music offering was a star of its recent, otherwise disappointing quarter; the Time Warner flirtation hints at plans to mount a challenge to Netflix and Amazon.

Apple’s competitive landscape is changing, and it can no longer rely only on the appeal of its hardware and user interface design when one of its biggest threats is Amazon – whose retail roots give it a different approach to margins, and whose hardware competes on price and convenience rather than beauty.

At least the iPhone maker has largely dropped the tactic of attacking key rivals via patent suits, though its Samsung feud grumbles on. Other players were calling the lawyers this week though. Significantly, Huawei filed its first patent infringement suit against Samsung, in China and the US, citing the breakdown of licensing talks for technologies related to 4G, operating system and user interface. This is one of the first instances of a Chinese company suing a major established mobile player and shows how Huawei, ZTE and others are determined to be major IPR holders in 4G and 5G.

Google had a good day in the courts, winning its battle with Oracle over alleged copyright infringement related to Java code used in Android. The jury rejected Oracle’s claim that Google should have licensed a set of Java APIs, judging that these were covered by ‘fair use’ rules. This reverses the outcome of an earlier trial in the same court, which concluded that the Java APIs were eligible for copyright protection, and sets an important precedent for the wider open software business. Oracle may appeal, but for now has lost its chance of hefty damages – it was calling for over $9bn based on its calculation of the profits Google has made from Android, plus loss of Java revenue.

Android continued to be a major feature of Google’s I/O developer conference, of course, but most of the headlines from the event centered on newer directions. Like Apple, Google needs to respond to the slowdown in the smartphone segment and ensure that its software and services are just as dominant in emerging devices and user experiences. It introduced its own challenge to Amazon Echo, called Google Home, featuring its AI-driven counterpart to Siri, Google Now. The highest level of excitement surrounded its moves into virtual reality, which it sees as the heart of the next generation of web experiences, and machine learning, which will drive the new, highly personalized approach to search and query. Read Article Here

Finally, Time Warner isn’t the only venerable US media firm to be the subject of M&A talks. AT&T joined Verizon in the 10-strong list of bidders for Yahoo, according to Bloomberg reports, indicating that the US carriers, like their major smartphone suppliers, are turning their attention to content in order to generate new revenue growth and fend off Netflix and Amazon.

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