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Thursday, April 29, 2010

A priest, a rabbi, and a minister...

It happens thousands of times a week all over Silicon Valley. Friends gather after work for a drink at a bar, swap stories about bad bosses or the cool things they’re working on, then they head home. And many times each week, some of these patrons accidentally leave behind a mobile phone on the bar, or at their table.

Unfortunately, when one young engineer from Apple exited a bar in Redwood City last month, it wasn’t just any phone he left behind, it was a prototype of the new Apple iPhone; due out later this summer.

The person who found the prototype phone apparently made several attempts to find the owner, and when he couldn’t, he offered it up for sale to a handful of technology-oriented web sites. bought the phone for $5000. That’s their story anyway.

After thoroughly examining and testing the phone, reporter Jason Chen published a long story about it on the Gizmodo web site. Apple was not happy, and demanded the phone be returned. When Chen and Gizmodo initially refused, San Mateo County investigators broke into Chen’s apartment and seized computers, other electronics and credit card statements.

I’m not going to comment on the legality of this action, although I will say that the search warrant used said that the law enforcement officials who stormed Chen’s home were investigating a theft. From what I can tell, there was no theft, only a lost cell phone.

The entire case is getting a lot of attention in legal and journalistic circles regarding what is protected under the First Amendment.

What is more interesting to me about this story is, why is Apple so upset? For decades, Apple and its CEO Steve Jobs have used controlled leaks and sneak peeks, crafting these techniques into a communications art form designed to build buzz and excitement around pending product announcements. So why get so upset this time?

Maybe it’s because the stakes are higher now than ever before. Just today, Microsoft announced a deal with Taiwanese mobile phone manufacturer HTC. Apparently, Microsoft holds certain patents that are used in devices running Google’s Android operating system. So rather than sue HTC, the way Apple did a month early over similar patent issues, Microsoft chose to make HTC a partner. Why?

HTC started out as a maker of phones that ran Microsoft’s Windows Mobile software. But because the Windows Mobile phone didn’t sell well in the market, HTC dropped the Microsoft operating system in favor of Google’s Android OS. Microsoft knows from its past success that he who owns the OS calls the shots. Losing HTC to Google surely left a bad taste in Microsoft’s mouth. So rather than sue HTC over patent violations, Microsoft convinced HTC that partnering was a better path for both companies.

To no one’s surprise, HTC has announced that it will produce new mobile phones that run Microsoft’s next mobile OS, Windows Phone 7.

And in other news this week, Hewlett Packard announced it was buying Palm for $1.2B. It may seem like a curious move at first, but if you look a little deeper, HP has its eyes set on the Palm operating system, webOS, also known as the Garnet OS. The Palm OS is generally considered to be one of the most powerful and innovative operating systems for mobile devices currently in the market. HP, which has already made it clear that it wants to be a major player in mobile computing with netbooks and tablets, needed an OS to compete with Google, Microsoft, RIM and Apple.

Which brings us back to Apple. One of Apple’s core strengths (no pun intended) with the iPhone is its app store. Those apps are developed by third parties, live in the cloud, and are downloaded for a fee by customers. Being able to dictate how those apps are developed may end up being the difference between who wins and loses the mobile phone wars.

So maybe that’s why the bigwigs at Apple are so wound up over the phone that was left at the bar in Redwood City. Just what’s in that new OS anyway?

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