Apple Suit Against Motorola Over FRAND Licensing Rates Dismissed 249
chill writes "A suit by Apple claiming that Motorola Mobility, now owned by Google, is seeking unreasonably high license fees for the use of patents on wireless technology has been thrown out by a judge in Madison, Wisconsin. Last week, Apple told the court it would pay up to $1 per device for a license to Motorola patents covering cellular and Wi-Fi technologies. Motorola Mobility was arguing for a royalty payment of 2.25 percent on each device."
From the article: "'At the final pretrial conference, I asked Apple to explain why it believed the court should determine a FRAND rate even though the rate may not resolve the parties' licensing or infringement disputes,' Crabb wrote in an order on Friday. 'I questioned whether it was appropriate for a court to undertake the complex task of determining a FRAND rate if the end result would be simply a suggestion that could be used later as a bargaining chip between the parties.'"
Apple also said... (Score:5, Interesting)
Apple also said it would ignore the court's order if it chose more than $1/device.
Re:Apple also said... (Score:5, Interesting)
Apple also said it would ignore the court's order
Steve Jobs should've been alive.... and witnessed the humiliation his so-called thermonuclear war is bringing onto his beloved company.
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If Steve Jobs were alive, he'd have RDFed the judge into agreeing with him.
Re:Apple also said... (Score:5, Insightful)
Apple was a thug long before Steve Jobs declared thermonuclear war, but Jobs was a master at concealing that. Tim Cook isn't. This is one of several reasons that it is just wonderful for the rest of us that Tim Cook now runs Apple.
Re:Apple also said... (Score:5, Funny)
Apple was a thug long before Steve Jobs declared thermonuclear war, but Jobs was a master at concealing that. Tim Cook isn't. This is one of several reasons that it is just wonderful for the rest of us that Tim Cook now runs Apple.
Actually, Steve Jobs wasn't very good at concealing the fact he was an arsehole, this we have known since the 80's. Granted Tim Cook is worse at it, but that doesn't make Steve Jobs good at it.
Think of it this way, I'm a better singer than 99.9999% of all rappers, but that doesn't mean I can hold a note (nor does it stop me wailing 80's power ballads down the highway).
Re:Apple also said... (Score:5, Funny)
Think of it this way, I'm a better singer than 99.9999% of all rappers, but that doesn't mean I can hold a note (nor does it stop me wailing 80's power ballads down the highway).
The RIAA may beg to differ. At the rate we are going, our cars will listen to what we are singing, determine how many people are in the car listening to it, and automatically charge you for royalties on each person as well as a surcharge for bad singing.
Re:Apple also said... (Score:5, Funny)
Think of it this way, I'm a better singer than 99.9999% of all rappers, but that doesn't mean I can hold a note (nor does it stop me wailing 80's power ballads down the highway).
The RIAA may beg to differ. At the rate we are going, our cars will listen to what we are singing, determine how many people are in the car listening to it, and automatically charge you for royalties on each person as well as a surcharge for bad singing.
I'm sure I'm out of tune enough for it to be considered an original work. Especially with the low standards of originality in the music industry.
Re:Apple also said... (Score:5, Funny)
In your case then you'll also be required to license the Autotune patents.
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Judges really don't like it when you ignore them. If Apple keeps going down this road as with the advertisement debacle its going to get a spanking it will be a long time forgetting.
Re:Apple also said... (Score:5, Interesting)
Wait, and wasn't Apple wanting something like $30/phone from Samsung for rounded corners, the bounce back patents, and a couple other small ones???
$1 is laughable when compared to the importance of the phone.
Re:Apple also said... (Score:4, Funny)
Some might argue that the most important feature of the phone from the perspective of the marker is how well it sells. And when it comes to that, the rounded corners and the way the interface looks and behaves may be much more important than the actual tech that is working inside. People base a lot of purchasing decision on recommendations and advertising, not on reading the full specs.
Re:Apple also said... (Score:4, Interesting)
Regarldess of the merit of your speculation on the importance of rounded corners relative to the functionality of a phone, it would seem that the legal world is now coming around to the belated realization that rounded corners are not actually something you can patent. [project-disco.org]
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Apple did not make the cash pile they are sitting on because of the patents.
Perhaps that has something to do with the fact that Apple lost more than $100 billion of market value in the last seven weeks, after becoming a patent troll.
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Re:Apple also said... (Score:5, Funny)
The most important feature of a phone from the perspective of a marker is how absorbent the surfaces are. Gorilla glass - the marker is just going to rub off. Plastic is generally better but you still need to avoid touching it for a while to let it dry. Paper would be better, but not a practical material to make smart phones out of.
Re:Apple also said... (Score:4, Insightful)
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It is if you install a VOIP app.
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Re:Apple also said... (Score:5, Insightful)
That's the point. It's not a phone, just like the iPhone would not be a phone without the patents that Apple is refusing to pay more than a pittance for.
They asked massive amounts for patents which are not essential to making a phone. It stands to reason that the patents required to make it a phone are worth at least a tiny bit more.
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Re:Apple also said... (Score:5, Insightful)
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Not really, they don't make their own baseband chips, they buy from someone else who makes them and has been part of that R&D effort over the last 20 years.
I hear what you're trying to say, but its just not true since they mostly use Qualcomm's chips.
While I don't agree with patents like Apple is using in general, I'm still kind of with Apple on the Samsung thing as it was CLEARLY intended to look like an iDevice in its original form.
Apple's patent shit does piss me off in that I realize one of the reas
Re:Apple also said... (Score:5, Insightful)
While I don't agree with patents like Apple is using in general, I'm still kind of with Apple on the Samsung thing as it was CLEARLY intended to look like an iDevice in its original form.
That's not clear at all. It was designed to look like a modern fashion phone. It could equally have been designed to look like an LG Prada, and in fact, given the extra buttons and Samsung logo, the Samsung phones are much closer to that than an iPhone. The iPhone was clearly also designed to look a bit like a Prada. The fact that the two are similar does not have to mean that there is any direct design link whatsoever.
The key thing to understand is that some level of copying is legitimate here. Car gear shifts all look identical so that you can use them easily. Phones dialpads look similar so you can dial in the same way. Modern monitors mostly have the buttons hidden in the bottom right so they look cool but you can still find them. All of next years clothes will have the set of colours which are currently being shown by the top designers. Part of this is functional and part of this is trying to define expectation through a common look.
Everyone copies and that's okay. It wouldn't be okay if the products were indistinguishable, but they weren't. Apple had a registered design. They could expect protection of that, and Samsung didn't use it. Apple could expect copyrights to mean Samsung would not to do a literal copy of their design and they did not. Anything more is just sour grapes.
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I don't think so. First and foremost, a phone must actually be a phone. If it doesn't actually do something, it's not going to sell at all. Would you pay $600 for a polished slab of solid plastic?
Re:Apple also said... (Score:5, Funny)
Does it have an Apple logo on it?
Well... America is doomed (Score:5, Insightful)
And this people is why America is doomed. On a tech site, filled supposedly with nerds, someone actually claims that in a piece of high tech equipment, design is more important for usefulness then the tech inside that allows it to do what it is supposed to do. Yes, rounded corners are more important for a phone then the tech that makes it able to make phone calls...
Oh, I am fully willing to accept that siddesu is just a moron who doesn't know anything about the patents in question but still, this is supposed to be a tech site. Claiming $30 bucks for design vs $1 for vital tech... it is clearly insane. Only managers who spend more on advertising then on development think that. Don't worry if it works, we just sell it with more advertising. It is actually lethal and has been proven so before, the first rise of the Japanese car industry happened over Detroit just adding more fins rather then innovating.
People don't read the full specs...
Yeah because when you are buying a phone, being able to make phone calls with it, that is just details. It is the styling! You might not be able to use it but damn, does it look good!
Re:Apple also said... (Score:5, Informative)
Actually, Apple Reality Distortion Field notwithstanding, pretty much all patent royalties [wikipedia.org] are [patentbaristas.com] based on [inventionstatistics.com] a percentage [fishiplaw.com].
This study [unh.edu] puts the average royalty rate for a patent in the electronics industry at about 4.5%. The $1/device Apple is requesting would be about 0.2%. As way of comparison, Here are royalty rates other companies are asking [connectedp...online.com] for essential LTE patents. They range from 0.8% to 3%. Motorola's 2.25% is a bit on the high end but within the norm. Apple's requested 0.2% OTOH is off the scale at the low end.
Based on what 5 minutes of googling turned up, Apple is going to lose this, and lose it badly.
Re:Apple also said... (Score:5, Informative)
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Typically LTE percentage royalties comes from the cost of the LTE modem in the device. Apple would likely be happy to pay 2.25% of the Modem cost.
The article says
(my emphasis). So in other words, they would still think about the percentage of the cost of the Mercede
Re:Apple also said... (Score:4, Informative)
Incorrect - Motorola's opening offer is a little on the high side for FRAND patents, but it is certainly within the bounds of acceptable and fair pricing. In most cases, both companies have a suite of patents (FRAND or otherwise) that will be licensed each to the other, and the final licence fee that is paid is the net result of the respective values of those patents being applied (Company A has a patent portfolio whose accepted licence cost would be 22.5% of the cost of Company B's device, and Company B has a patent portfolio whose accepted licence cost would be 21% of the cost of Company A's device. The two parties agree to cross-licence each other's patents, and the difference in value is paid as a licence).
As Apple has apparently refused to put any of their own patents on the table for licencing during this discussion (citation needed, as I have seen this commented on elsehwhere, but my Google karma is a bit off today), they have nothing with which to offset the FRAND licence cost other than goodwill and the karma that they have built up during the last couple of years of working closely with Samsung.
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The "F" in FRAND doesn't stand for "free".
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Re:Apple also said... (Score:4, Informative)
Re:Apple also said... (Score:4, Informative)
That's either misinformed or a lie (Score:2)
Not only that (Score:5, Interesting)
It's disingenuous for them to say that they will do something without the court ordering it, when the entire reason the court is involved is that they refused to even make an initial offer, choosing instead to pick what they thought would be the best venue to sue in. Obviously, that didn't work out so well for them after the judge figured out what was going on.
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I do not understand (Score:5, Insightful)
I do not understand why the same company which sued others over some lousy rounded corners refuses to pay royalties over others' patents?
If I expect others to pay me over some lousy rounded corners I expect myself to play the same game - and will pay the royalty I owed to others when I use their patents.
At least, that was been taught to me by my elders.
Maybe Apple Inc has other kinds of "elders" - one who expect others to pay them while refusing to pay others.
Re:I do not understand (Score:4, Insightful)
Because Apple made it's billions stealing other people's ideas, and it would really cut into their profits if they had to pay to use the ideas they're appropriating.
Re:I do not understand (Score:5, Funny)
It's pretty straightforward, actually: Apple are a bunch of cunts. Hope that clears things up.
Re:I do not understand (Score:5, Funny)
It's pretty straightforward, actually: Apple are a bunch of cunts. Hope that clears things up.
The association of collective vagina's takes offence to this comparison.
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Re:I do not understand (Score:4, Funny)
Re:I do not understand (Score:5, Insightful)
Apple: All your ideas are belong to us.
What more to understand?
Re:I do not understand (Score:5, Interesting)
i'll get modded down but the way FRAND works is the rates are usually a few cents per device and you cross license any FRAND patents that you have as well. you don't have to license non-FRAND patents.
apple doesn't have much FRAND patents but they have a lot of non-FRAND patents that others want. everyone else has lots of FRAND but not much non-FRAND that is wanted now. so its a game that lasts years
in the end apple will write a huge check for back royalties and come to some kind of agreement on everything else
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A point I've heard mentioned in other places. I guess the divide is between a company who has, and a company who doesn't have, FRAND patents.
I think the idea is that MotoMobility/Google are asking for a higher rate due to a lack of reciprocal FRAND patents.
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Reciprocity has nothing to do with FRAND. In fact the whole point of FRAND is that in exchange for being part of the standard the company promises fair and reasonable and non-descriminatory rates. Hence the name. You are suggesting the opposite.
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Reciprocally licensing patents is part of the price, so when calculating the "fair and reasonable" price for a company that doesn't have any patents to license that way (or does have them, but refuses to license), the dollar price is going to be higher to account for those missing patents.
Re:I do not understand (Score:4, Interesting)
The whole idea of FRAND is that the price is non-discriminatory. So the price is the same for everyone, but the form of payment may be different. I'm not discriminating if I charge one guy $2.50, and another guy pays $1.50 but also cross-licenses me a patent that would be cost equivalent $1.00.
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apple doesn't have much FRAND patents but they have a lot of non-FRAND patents that others want.
What? You mean those stupid patents on rounded corners and arranging icons in a row? Others may want such 'features' but they ought not have been allowed to be patented in the first place.
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rounded corners are design patents. everyone has them. check out the patent office, samsung has patents on the shape of their refrigerators
Re:I do not understand (Score:5, Insightful)
apple doesn't have much FRAND patents but they have a lot of non-FRAND patents that others want.
That is not clearly true at all. It is more accurate to say, Apple says it has a lot of patents that others want. Case in point: the bouncing scroll patent. Invalidated. [gizmodo.com]
My feeling: Apple has a bunch of junk patents but is skilled at gaming the courts.
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i'll get modded down but the way FRAND works is the rates are usually a few cents per device and you cross license any FRAND patents that you have as well.
FRAND patents are typically a % of either manufacture or retail costs of the device, in any industry.
Apple's original argument was the 2.5% was too "expensive" for a iPhone they want to retail for $600 verses the same 2.5% that HTC pays for their $50 disposable phones.
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They are, actually. You just get a better price by trading in some of your own patents. But 1-3% base price (before cross-licensing enters the picture) is pretty normal.
Re:I do not understand (Score:5, Interesting)
"No, no, no. Where do you get this from?"
Reality, that's how it works. I'm sorry you don't like that.
"What is this arbitrary "component" exclusion?"
It's not arbitrary. An aircraft radio transponder for example is in itself a complete product. Although you'd probably rarely want to you can use it in isolation of any plane so you'd pay the FRAND rates on that particular product rather than whatever plane you plug it into.
Besides, most of that tech is out of it's 20 year patent term anyway.
"Any device is going to use more than an handful of those. A percentage of the total cost is absurd."
The 2.5% rate is not per patent, it's for the full relevant portfolio of patents so said rate may well cover, say 50% of those patents, and another 2.5% to say Samsung, 40%, then say 0.5% to Nokia or whatever for the final 10%. The point being that it probably doesn't amount to much more than 5% to license for usage the entire wireless stack for a mobile phone whether wifi or gsm, 3g or lte. Most companies though mitigate the cost by cross-licensing their patents instead, so using this example, Samsung and Motorola probably just trade enough FRAND patents to not even bother charging each other. Apple's problem is that it wanted the FRAND patents free, but didn't want to give up any of it's useful patents like those related to multitouch in return. The percentage cost is irrelevant to most companies who aren't arrogant when it comes to patent negotiation.
"Nobody pays FRAND royalties like that."
Again, everyone does, and again, really, I'm sorry reality upsets you, but being upset about it doesn't change it. I'm also sorry you've clearly got no first hand experience of this topic, but ignorance of it doesn't make you right, it just makes you ignorant.
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I don't think you understand what FRAND is or what the licencing terms are. You pulled a stupid statement out of your ass by suggesting that it's normal to only pay a few cents per device if there is no cross licencing.
Re:I do not understand (Score:5, Insightful)
Moto offered a price. Apple thought it was too high and refused to negotiate. Then they sued. They asked the court to set the rate. The court was skeptical, thought the bargaining should be between the companies, but was will to go to trial anyways. Then Apple told the court that Moto should be bound by the court's decision, but that if the rate was too high, Apple would NOT be bound to the decision. Oh, and whatever the rate is, Apple only wants it to apply going forward. All the past patent violations should be free. The court dismissed the suit with prejudice.
Which part was Apple treated unfairly? The initial offer? Apple should go to eBay and sue every seller with a high "Buy it Now" price. Is it unfair to Apple to ask them to pay for years of past violations?
It is true that Apple uses the Moto-licensed Qualcomm MDM6610 chips in the iPhone 4S (which was explicitly excluded from Moto's suit in Germany), but why would that license apply to other iPhones that aren't using the MDM6610 chips (the iPhones that Moto actually sued over)? Or is that unfair to Apple, too?
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If Motorolla didn't want to license things for a fair, reasonable, and non-discriminatory rate then they should not have made the patent part of the standard. They chose to have it as part of the standard so it is subject to FRAND licensing.
Apple didn't make "rounded corners" part of a standard (nor did they actually sue over them). They are under no obligation to license that IP at all, let alone at a reasonable rate.
Re:I do not understand (Score:4, Insightful)
Apple didn't make "rounded corners" part of a standard
Apple didn't make rounded corners - period; many others did that way before them. The stupid patent office shouldn't have issued patents on such silly things to Apple. And Apple should've been decent enough not to sue others over such trivial pathetic matters.
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As posted above, a normal part of a FRAND license is reciprocal licensing of your FRAND patents. If you don't have enough (or any) to balance out what you want to license, then a higher rate is to be expected.
Re:I do not understand (Score:5, Insightful)
Motorola did offer to license at a FRAND rate. This is normally followed by a negotiation (based on things like is the licensee offering a license to important patents in return), but Apple declined to negotiate. Note that "FRAND" does not mean "whatever rate the licensee wants to pay".
Re:I do not understand (Score:4)
Motorola wanted more then 10x the going rate for the FRAND patents.
Citation please.
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Seems to me, you pulled the "going rate" for a FRAND patent out of your butt.
Re:I do not understand (Score:5, Informative)
You sir, are either ill informed or a fanboy.
Moto offered Apple the same percentage that they offer everyone. Everyone else has goodies that Moto was willing to accept in lieu of the full 2.25%. Moto either A. didn't want what Apple was willing to trade or B. Apple didn't want to trade anything Moto wanted. This means Moto was expecting the full 2.25% that it asks from anyone.
Apple's being a whiny, greedy child and deserves to be punished for infringing on legit IP they NEED to make a smartphone/tablet/etc...
Moto doesn't need trade dress patents from Apple.
End of story.
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Apple's being a whiny, greedy child and deserves to be punished for infringing on legit IP they NEED to make a smartphone/tablet/etc...
Well, complaining about somebody being a fanboy and falling right in the other camp. Unless you give more numbers, it may very well be that Apple has a good case. Motorola could very well have set a very high price for "everybody" knowing that all its best buds would not have to pay anyway. That's not even very advanced, that's just a classic trick.
Anyway, any new player need to ask authorisation via licensing/exchange to all its competitors because they all hold mandatory patent and are all in bed tog
Re:I do not understand (Score:5, Informative)
and it matters not a whit if Motorola has made the same demands on other companies.
That's actually the only relevant part of ND in FRAND -- it matters greatly what other companies were offered and/or accepted in order to prove non-discriminatory pricing.
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Re:I do not understand (Score:5, Informative)
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Think of Apple as a cat. (Score:5, Insightful)
Apple has the same understanding of property as a cat - once they pee on it, it's theirs. It doesn't matter where an idea came from, once they pee on it/put in a iThing, it's forever Apple's property. It's unreasonable to them to pay anyone for anything they own/peed on, so the only possible value that would constitute FRAND to them is free.
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I don't understand why Slashdot posters continue to cherry pick which legal cases to cite as their basis for painting one Fortune 500 company saintly and another devilish. These large tech companies are involved in dozens of cases / litigations, some of which they are on solid ground, others of which they are on shaky ground. It's true for Apple, it's true for Google, it's true for everybody.
Actually, I take it back, you probably DO know this, just trolling regardless, huh.
No, I think you're the one who is trolling (Score:2)
So if you have examples of Google being as much of a dick as Apple, please do share.
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I do not understand why the same company which sued others over some lousy rounded corners refuses to pay royalties over others' patents?
It could be that they believe that the technology Motorola is providing adds a certain dollar value to the device, not multiplies the value of the device by its mere presence.
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...and the iPhone is build in China with zero American parts.
Fixed that for you.
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So how much good is an iPhone without software -- all of which is written in the US.
Apple is killing themselves in this... (Score:3)
Smart judge. (Score:5, Insightful)
How many judges would have spotted that suit for the Trojan horse it is? This one did, and we are all grateful for it. No, she's not going to get famous for holding The Next Apple Trial, and that's great. For once, we have a judge who just wants to do her job. And she's a judge who knows that her job isn't to generate bargaining chips in commercial contracts negotiations.
Thank you Judge Barbara Crabb for telling Apple that asking Mommy for permission after Daddy already said no isn't going to work.
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Re:Smart judge. (Score:5, Funny)
For once, we have a judge who just wants to do her job.
Lucy Koh is another judge who apparently just wants to do her job, but as an Apple employee.
Re:Smart judge. (Score:4, Funny)
For once, we have a judge who just wants to do her job.
Lucy Koh is another judge who apparently just wants to do her job, but as an Apple employee.
Ooh, some Apple spinmod did not like that post, oh dear.
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Translation: Any judge who rules against Apple is saintly. Any judge who rules for Apple should be disrobed. I miss anything?
Reality.
A way to satisfy both companies.... (Score:5, Funny)
Dismissed with prejudice (Score:5, Interesting)
I'm enjoying watching this... (Score:3)
All the big corps originally thought patent portfolios were a great way to eliminate competition, especially smaller companies that couldn't afford to defend themselves.
So now I'm _really_ enjoying watching the big companies themselves getting repeatedly screwed directly as a result of their own greed and legal creations.
I wonder how long it will take before Apple or some other big American corp finally does a U turn and goes whining to the US Government and suddenly the patent law just happens to get reformed.
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Last I checked, sales at Apple are still increasing, year-to-year.
I generally associate a company that is increasing its revenues with "success". Perhaps your standards differ.
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Profits. Increasing profits. If I buy oranges for $1 and sell them for $0.50, a doubling in revenue is pretty awful for me.
Re:Tim Cook is presiding over the demise of Apple. (Score:5, Informative)
Last I checked, sales at Apple are still increasing, year-to-year.
I generally associate a company that is increasing its revenues with "success". Perhaps your standards differ.
Absolutely they differ. Lets start Apple is losing share in the smartphone market [23% to 14.9%] and the tablet market [50.4%]. Apple is growing but slower than the opposition, and more importantly less than the market. That is a worrying trend.
As for your measure of company being large revenues as a measure of success. Apple is incredibly successful but large revenues is only part of the reason why.
Apple have a real problem, but you don't understand the issues.
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Priceless (Score:2)
Fanboi site macrumors is nowadays providing more unbiased coverage of Apple