Matt Johnson: Reputations in jeopardy as mobile smart phone giants square up

Jan 20 2010 By Matt Johnson, chairman of Mando Group

ANOTHER salvo has been fired in the intense battle between Apple and Nokia.Š It’s a complex dispute that could take years to resolve.

In the meantime, the majority of customers of both firms will doubtless continue to go about their business with little discernible difference to what they do or how they do it.

Or will they?

When two of the biggest brands in the world square up to each other, it’s naïve, surely, to believeŠ reputations are not at risk.

The dispute between Apple and Nokia arose after Nokia filed a complaint alleging that Apple had infringed 10 of its patents relating to 3G mobile phone technology.

The Finnish company accused Apple of “taking a free ride on the back of Nokia's innovation”, and demanded royalty payments from each of the 37m iPhones sold since the device was launched in 2007.

After this first shot was fired, Apple launched a counter-suit against Nokia accusing the company of “stealing” its technology and infringing on 13 of its patents.

The 37m figure shows the scale of the market they are fighting over, and gives a clue as to why this has become such an intense dispute in which regular blows are being traded. Nobody knows where it will take them – other than into expensive litigation.

At the weekend, it was reported that Apple has lodged further evidence with the US International Trade Commission requesting restrictions on Nokia trading.

With claim and counter-claim sprinkled with what some may regard as inflammatory remarks from both sides, it seems certain these disputes will take a long time to resolve. And, the longer it takes to end the feud, the greater the risk to corporate reputations and brands.

In their latest trading update, Nokia revealed that its share of the global smart phone market had slipped to 39% in the third quarter, compared to 42% a year earlier. That statistic provides another clue as to why these two global players are fighting so hard.

Doubtless they will say it’s about preserving, or even strengthening, their positions in fiercely competitive markets. But there are risks associated with what they are doing.

Apple is also being sued by photographic giant Kodak over alleged infringements involving technology used in its iPhone.

The stakes are high for whoever wins. They could be even higher for whoever loses.