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May 19, 2008

Apple takes a very big legal gamble? This could be a landmark case.

This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Analysis By:
Joe Weingarten
Executive Director, Macintosh Reseller Association
Implications: What if Apple losses? What will happen to one of its core revenue makers? What if Apple wins? Who else wins and loses?

Analysis: A few of us who follow Apple used to joke about a law suit a day filed against Apple, well this is a turn of events. Apple has filed suit to protect its right to control the accessory market for its products, namely the iPod and I am sure looking forward the iPhone.

Currently if you make a product that supports the iPod Apple wants and gets a royalty fee. However, Atico is not paying that fee. I am certain numerous  communication took place prior to the suit to no avail.

Here's the gamble, Apple generates income from all these royalties and more to come in the future on the iPhone add-ons. We can already see their approach with the  Apple SDK  where to sell a software product for the iPhone Apple collects 30% of the price. I was  suprised when I did a search for "Made for iPhone" in the trademark system, none exists nor has been applied for.

What happens if Apple losses this case. Watch for mass deflections of others paying for the "Made for iPod" royalty. If Apple wins, watch them expand the "Made for" to other product areas.

This could be viewed as a landmark case, will other companies start to demand royalties for secondary market items, Car manufacturers for all those 3rd party add-ons comes to mind.


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