Last week, a nine-member San Jose jury ruled in favor of Apple in the company’s patent infringement lawsuit against Android-based smartphone and tablet manufacturer Samsung. The jury awarded Apple more than $1 billion in damages, while deciding that Apple on its part had not violated any of Samsung’s patents. A total of seven Apple patentswere ruled to be infringed upon; every one of these patents was associated with look-and-feel and usability features associated with the iPhone and iPad designs.

Whether or not this ruling survives through further appeals and litigation processes, it might be underscoring the viewpoint that user experience as opposed to core technology is the defining aspect for consumption devices such as smartphones and tablets. At the same time, it poses a larger question about the utility and value of patents in the context of innovation in the post-PC era. Already, South Korean and the German courts have issued split rulings for Apple vs. Samsung, each court making a different set of judgments. As these patent wars escalate over the coming years, an early-stage entrepreneur building solutions on top of a mobile platform might be making not just a market adoption bet but also a regulatory bet on the platform/device/design process itself.

The success of the iPhone and iPad was a result of a revolutionary new design consisting of several key form-factor and UI decisions, and Apple has monetized these devices brilliantly. Google on its part continues to succeed in its own Android strategy. Clearly, mobility is a rising tide, and large enterprises such as Google and Apple and Samsung will continue to do well on the basis of their respective operational and financial war-chests. However, if mobile entrepreneurship is to continue unfettered, this might just be the time to revisit patent law and processes in view of the new realities of distributed workforces, pervasive mobility and global consumption economies.

Continue Reading ...

On August 9^th, Starbucks announced a $25 million investment in Square at a valuation of $3.25 billion. A partnership was also announced wherein Square would process all Starbucks credit/debit card payments and wherein the approximately 11,000 Starbucks stores will become part of the Square merchant network. Howard Schulz, the CEO of Starbucks will be joining the Square board. This partnership represents a potentially huge transaction base for Square whose customers so far have predominantly been small and medium businesses. Square currently has a number of direct, cash-rich competitors such as PayPal Here and Intuit GoPayment.

Starbucks currently represents the largest mobile payments network in the United States. On a weekly basis, more than 30 million transactions occur at Starbucks stores, a number of them from individuals who are tech savvy and relatively ready for mobile payments. The network effects on having a Starbucks store in a mobile payment processor’s merchant network can be significant in terms of attracting nearby SMBs to sign up as well. All these benefits would make Starbucks a highly sought after partner. By not choosing to partner with cash-rich Paypal and by instead partnering with Square for a not too significant equity stake but with a board seat, Starbucks seems to be indicating both its commitment to participate in the evolution of mobile commerce as well as its strong desire to be an influencer in this evolution. It will be interesting to see whether this leads to a domino effect over the coming months to enable Square to become a highly profitable independent leader in the space.

Continue Reading ...

On July 31^st, Microsoft unveiled its new cloud-based email service, Outlook.com, complete with a simple and clean UI and featuring integration with its own SkyDrive as well as with outside social sites such as Facebook and Twitter. Subscribers to its existing Hotmail service will over time be transitioned over to Outlook.com (a potential subscriber pipeline of more than 300 million individuals). Rather than revamping Hotmail, Microsoft has thus chosen to introduce a new email service from the ground up.

Tactically this makes sense: with Outlook.com, Microsoft avoids fighting existing consumer perceptions about Hotmail as well offers a product that can be positioned more squarely as an alternative to the incumbent leader Gmail. And as an addition to Bing, Outlook.com does seem to strengthen Microsoft’s competitive position vis a vis Google. However, does this introduction bring Microsoft closer to a cultural inflection point that requires it to choose between having an enterprise DNA vs. a consumer DNA? Also what does this mean in the context of social networking? If the current school-going and twenty-something generation ends up moving away from email and towards mobile social networks, Outlook.com may not end up as the kind of difference maker that Microsoft hopes it will become. Microsoft hasn’t unveiled a consumer social network yet, but if it does do so at some point (maybe a Yammer for consumers), then that will make things truly interesting for the enterprise software giant.

Continue Reading ...