Apple railed against Samsung’s conduct in a court filing response seeking sanctions against Samsung for releasing excluded evidence to reporters as the legal drama between the two technology giants continues to unfold.

“Litigation misconduct is apparently a part of Samsung’s litigation strategy — and limited sanctions have not deterred Samsung from such conduct,” Apple said in its filing to Judge Luck Koh and the U.S. District Court in San Jose.

Apple, curiously, isn’t seeking a mistrial, which it argues would benefit Samsung, or even a fee. instead, it asked that the court grant Apple a favorable judgement on its claim that Samsung is illegally using its design patents. it also requested that the court make the jurors aware of Samsung’s actions, and to exclude evidence related to the “Sony design exercise.”

Samsung didn’t take the accusations standing down.

“Apple’s filing is baseless and we will be filing a response,” said a Samsung representative.

The trial between Apple and Samsung is closely watched because of the potential ramifications of the case. On a broader level, the suit represents a battle between Apple and the entire Google ecosystem, and could represent a significant turning point.

Apple had said yesterday that it was outraged when Samsung released slides of Samsung phone designs, as well as an excerpt from the deposition of former Apple designer Shin Nishibori. The company vowed to seek an “emergency motion for sanctions” and other relief.

In addition to the favorable judgement, Apple wants Samsung’s lead attorney, John B. Quinn of Samsung’s law firm Quinn Emanuel Urquhart & Sullivan, to identified who drafted and released the press statement.

Apple argued that the move was the latest misconduct for the Korean technology conglomerate, and listed its past actions. Samsung previously failed to comply with two discovery orders on its analysis of Apple products. Samsung also failed to produce financial information relevant to establishing Apple’s damages. it has later failed to comply with an order to produce the production of source code for accused Samsung products. Lastly, the Samsung had destroyed evidence deemed favorable to Apple. Apple noted Samsung was sanctioned each time.

The squabble is the latest between the two companies during the case. The two sides spent a considerable portion of the first two days of court vying for various parts of evidence to be included, or excluded from opening statements as well as testimony. The case picks back up on Friday with a continuation of the testimony of Apple SVP Phil Schiller.

Updated at 8:44 a.m. PT: to include a response from Samsung and further details from the filing.

The copy of the letter is below:

Apple Samsung Sanctions

Apple: Misconduct part of Samsung’s legal strategy

Today: Facebook upsizes its IPO, Apple (AAPL) reportedly will make the iPhone bigger, and Google (GOOG) will offer more in its search results.

Facebook adds more shares as investors clamor for IPO

Another day closer to Facebook’s initial public offering, another updated filing from the world’s largest social network that changes key details of its IPO.

The Menlo Park company will sell roughly 84 million more shares to investors than it had previously planned, according to Wednesday’s filing, after raising the proposed price of its initial shares Tuesday. Facebook is now planning to sell slightly more than 421 million shares at $34 to $38, though the company could still sell the shares 20 percent higher than the top of that range without filing yet another amendment to its Securities and Exchange Commission documents.

Facebook’s IPO gets bigger, but the company won’t offer the additional shares or share in the proceeds: the additional shares, along with another 10 million shares added to the overallotment option available to banks in charge of the sale, are all coming from early Facebook investors, mostly venture capitalists. Peter Thiel, famously depicted as the first big investor in Facebook in “The Social Network,” more than doubled the number of shares he is selling, from 7.7 million to 16.8 million. Accel Partners partner James Breyer will sell 49 million shares instead of 38.1 million; Russian billionaire Yuri Milner’s investment firm, DST Global, pushed its sale to 45.7 million from 26.3 million, while the Russian Internet titan he founded, Mail.ru Group, will also increase the shares it sells. Institutional investors Goldman Sachs and Tiger Global, among others, also increased the stakes they will sell.

While the additional shares allow individual investors — who have been clamoring for shares — a better chance of claiming a slice of the company, the bigger exit for early investors scared some analysts.

“The basic question you have to ask is, ‘Do you want to buy a company where all the insiders are heading for the door?’ ” University of Oxford professor Tim Jenkinson told the Wall Street Journal.

“When you see insiders unloading their stakes, you start to wonder why. I could see it turning some institutional investors off,” Greenwood Capital Chief Investment Officer Walter Todd told Bloomberg News.

Then again, demand for those shares are too high to believe that higher cash-outs by early investors will change anyone’s mind.

“An increasing number of institutional investors are looking beyond the value of the business today and looking at the future growth,” Samuel Schwerin, managing partner at Millennium Technology Value Partners, told Bloomberg on Tuesday. “Those drivers are extraordinary in size, including international and mobile and commerce.”

That drive for a piece of Facebook is obvious in the fact that almost all the banks taking orders had closed off orders by the time the markets closed Wednesday, according to Reuters. with all the orders in and shares being divvied up, little is left but to state the final price of the shares — expected Thursday, but possible earlier, including Wednesday evening — and start raking in the cash. if Facebook sells all the shares offered, including the overallotment, at the top of its latest stated range, it would bring in up to $18.4 billion at a valuation of $104.1 billion.

Numbers like those, and all the hype about a record-setting IPO out of Silicon Valley, have observers attempting to frame the discussion outside of financial terms.

“This is much more a spectacle, a media event and a cultural moment than it is an IPO,” GreenCrest Capital analyst Max Wolff told Reuters. “This is not a game of models and fundamentals at this point.”

Apple ordering larger screens for iPhones, reports say

While Facebook confirmed Tuesday evening reports about a larger IPO with Wednesday’s filings, Apple has yet to confirm the other “bigger” story of the day — a bigger screen on the new iPhone.

Notoriously tight-lipped, especially when it comes to upcoming gadgets, the Cupertino tech company is unlikely to dignify Wednesday’s reports with a real response, but The Wall Street Journal and Reuters independently reported that Apple is ordering screens for the next iPhone that are roughly 30 percent larger in area.

The two news sources, relying on anonymous sources, said that Apple has been ordering screens that measure 4 inches diagonally for the next generation of its popular smartphone; the previous five iterations of the iPhone have had screens that measured 3.5 inches diagonally.

The reports make sense, as Apple is battling the new champion of cellphone companies, Samsung, which offers smartphone screens even larger than the new reported iPhone size. However, one analyst is dubious of the report.

“We’ve seen this rumor before … and before … and before,” Avi Greengart, research director for consumer devices at Current Analysis, told Mercury News staff writer Patrick may. “And it hasn’t panned out yet. sure, it’s a logical rumor from the perspective that the iPhone has a significantly smaller display than other flagship smartphones on the market today. but it also has an extremely high resolution, and that smaller design makes the device fit better in your hand.

“Besides,” Greengart added, “the last time I checked the iPhone was selling very well.”

Google taps extensive database for new search results

Google is also doing pretty well, continuing to dominate search. the Mountain View tech giant isn’t leaving its core business alone, however, announcing Wednesday a new feature in its search results.

Google announced it would begin offering tangentially related search results in a box to the right of the main links it currently offers. the information, which will come from the “Knowledge Graph,” Google’s name for a database of 500 million commonly searched topics, will offer more graphical representation and instant information on the search subject and related topics.

“Over the years, as search has improved, people expect more,” Amit Singhal, vice president of engineering at Google and the head of search, told Reuters. “We see this as the next big improvement in search relevance.”

The move continues a trend of search engines offering more than just a standard list of links for each query. For instance, Microsoft announced a major change to Bing that will offer searchers three distinct columns of results for every search, including social results from Twitter, Facebook and other networks.

Silicon Valley tech stocks

Up: Yelp, Google, LinkedIn, Jive, Cisco (CSCO), Electronic Arts

Down: Netflix (NFLX), Zynga, Advanced Micro Devices, Juniper, VMware, Symantec, Splunk, Nvidia, Hewlett-Packard (HPQ), NetApp, Intel (INTC), Apple, Oracle

The tech-heavy Nasdaq composite index: Down 19.72, or 0.68 percent, to 2,874.04

The blue chip Dow Jones industrial average: Down 33.45, or 0.26 percent, to 12,598.55

And the widely watched Standard & Poor’s 500 index: Down 5.86, or 0.44 percent, to 1,324.80

Check in weekday afternoons for the 60-Second Business break, a summary of news from Mercury News staff writers, the Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.

Biz Break: Facebook’s IPO, Apple’s iPhone and Google’s search results all may get bigger, but are they better?

Michael Harper for RedOrbit.com

Facebook increased the size of their IPO this morning by nearly 25%. Their initial public offering is already expected to set records, most notably the largest IPO of any internet company, even larger than Google’s. This news comes in the wake of yesterday’s announcement that they were losing not only advertisers, but the trust of their users as well.

The eight-year-old company will also be adding about 84 million shares to its IPO, putting the total around 421 shares when the social media giant goes public tomorrow.

According to Reuters, the company itself has not increased the number of shares they are selling. Instead, these extra shares will be sold by early investors, such as PayPal co-founder Peter Thiel.

Mark Zuckerberg’s voting power will also be reduced from 57.3% to 55.8% as a result from these extra shares.

With these changes and these extra shares, Facebook stands to have the third-largest initial share sale in the US, next to American heavyweights General Motors and Visa Inc.

General Motors, by the way, announced yesterday they were going to pull their paid ads on the social networking site, an account which provided Facebook with $10 million of advertising.

Such news has caused analysts and investors to view Facebook in a dim light, leaving questions about Facebook’s long-term viability.

GreenCrest Capital analyst Max Wolff isn’t viewing the IPO so favorably, either.

Speaking to Reuters, he expressed his concern this way:

“This is much more a spectacle, a media event and a cultural moment than it is an IPO. This is not a game of models and fundamentals at this point.”

News of GM’s departure is likely to worry the Wall Street types, but what of Facebook’s users: the normal, every-day students, mothers and small business owners?

According to an associated Press-CNBC poll yesterday, half of Americans think Facebook is a passing fad, while 3 out of every 5 users do not trust the company to protect their personal information. Furthermore, only 12% of those polled would feel comfortable making a purchase on the website. As for ads, an expected major source of income for the company, a majority of users (57%) say they never click on them.

Stats like this are likely to make early investors second-guess their decision to buy stock in Facebook.

After all, the site continues to grow, but if they can’t figure out how to make money from the more than 900 million people who use the site globally, they won’t be able to stick around much longer.

In 2011, Facebook had $1 billion in net income on a revenue of $3.7 billion. The question of if they’ll be able to add to this revenue is something yet to be seen.

As they march into their IPO, they stand ready to trump Google by $2 billion as the largest public debut of any Silicon Valley company.

Facebook is scheduled to begin trading on the Nasdaq this Friday. Wall Street banks Goldman Sachs, JPMorgan and Morgan Stanley will host the IPO.

Facebook Increases IPO, Again

Google topped tech headlines on Wednesday, unveiling what it called its “Knowledge Graph,” a Bing-like “snapshot” panel with results that appear closer to Wolfram Alpha’s own knowledge engine. Now, when a user searches for an “object” – such as the “Taj Mahal,” “Mona Lisa,” or “Leonardo da Vinci,” Google’s search results will try to identify the proper context for the search, identify key facts about it, and then lead onto related topics for further discovery.

Meanwhile, Verizon Wireless said that users grandfathered into unlimited data plans will soon have to switch to tiered pricing if they upgrade their devices. Over the summer, Verizon plans to introduce data share plans, which will allow for multiple devices to be connected to the same account – whether that be families or small businesses. When that happens, bid adieu to unlimited data.

In other mobile news, a report from the Wall Street Journal indicates that Apple plans to give its next iPhone a larger screen. The newspaper reported that Apple has ordered screens from its Asian suppliers that are “at least” a half-inch bigger than the current 3.5-inch screens used on every other model of the iPhone thus far. Production for the new 4-inch screens is set to begin next month. For more iPhone news, see: Will China Mobile Finally Get the iPhone? and Zooey Deschanel, Samuel L. Jackson Ads Boost iPhone Buzz.

Also making headlines on Wednesday:

For more from Angela, follow her on Twitter @amoscaritolo.

For the top stories in tech, follow us on Twitter at @PCMag.

Google’s Knowledge Graph; Verizon Nixes Unlimited Data; 4-Inch iPhone Rumors

New Delhi: It’s the second Sunday of may and Google is wishing all the mothers with its characteristic doodle on Mother’s Day. in the animated doodle on the Google home page the two Os in the Google logo turn into kids and give their mother – the second G – a purple flower.

Google has been celebrating Mother’s Day with its doodles for a number of years now and the Mother’s Day doodle always has a flower in it.

While Mother’s Day is celebrated on different days in many parts of the world, it is the second Sunday of may (May 8 in 2011) is most widely celebrated. Anna Marie Jarvis, had started a campaign in 1907 following her mother’s death to make Mother’s Day a recognised holiday in the US. in 1912 she obtained trademarks for the phrases “second Sunday in May” and “Mother’s Day” and established the Mother’s Day International Association. US President President Woodrow Wilson signed a law making the holiday official. but Jarvis was disappointed with the commercialisation of the event.

It’s the second Sunday of may and Google is wishing all the mothers with its characteristic doodle on Mother’s Day.

The ancient Greek and Romans also held festivities in honour of their mother goddesses. in Britain and Celtic Europe, goddess Brigid and later St. Brigid were honoured with a Mother’s Day in spring.

On March 21, to commemorate the Arab Mother’s Day, Google had put up a Mother’s Day doodle on its home pages in Arab countries including Egypt, Bahrain, United Arab Emirates, Jordan, Libya, Kuwait, Lebanon, Oman, Qatar and Saudi Arabia.

Mother’s Day is celebrated on different days of the year in different countries of the world, beginning with Norway on the second Sunday of February to December 22 in Indonesia.

For a dozen years, Google has been occasionally swapping its everyday logo for a doodle. The Google doodles, an artistic take on the Google logo, have gained immense popularity over the past few years and the Google doodle team has put out commemorative doodles on numerous events of international or national importance, ranging from news events, civic milestones, birthdays, death anniversaries and important dates in history. Google estimates it has created more than 900 doodles since 1998, with 270 of them running in 2010. some appear globally, and others are tailored for local markets.

Google doodles have become more animated and interactive in nature and Google seems to be fast doing away with static images for their doodles.

Mother’s Day: Google wishes mothers with a doodle

Fortune released the Fortune 500 list for 2012, and Apple is now in the top 20 of the list of the largest U.S. corporations in the #17 spot. That’s a vast improvement from last year’s ranking at 35.

Apple has a way to go to get into the top five, which is populated by such famous names as Exxon Mobil, Wal-mart Stores, Chevron, ConocoPhillips, and General Motors. HP was the top tech business in the list at #10, while perennial Fortune 500 place sitter IBM came in behind Apple in the #19 spot. somewhere, Steve Jobs must be smiling…

In Fortune’s industry grouping for “Computers, Office Equipment”, HP took the top spot, Apple the second place, and Dell, Xerox, NCR and Pitney Bowes followed the leaders. In case you’re wondering where old arch-rivals Microsoft and Dell showed up, they were at spots 37 and 44 respectively. Intel was out of the top 50 in spot number 51, and Google followed the pack in the #73 spot.

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Apple climbs to 17 on Fortune 500 list

Plus will you update to the paid version?, the importance (or not) of manufacturing, make your own background music and more

A quick burst of 9 links for you to chew over, as picked by the Technology team

We created a utilitarian ethics computer to replace government >> Saturday Morning Breakfast Cereal

Weird is the wrong word. Indicative of what happens with monopolies perhaps better.

Apple’s tax strategy aims at low-tax states and nations >> NYTimes.com

That’s the web headline. The paper headline (and above the article online, but not the web page itself) is “How Apple sidesteps billions in taxes”. It’s lengthy, and details how Apple does indeed sidestep billions in taxes. and so – as the article says – do Google and Microsoft and Dell and HP and others. (Facebook and Twitter will too.)

The key problem – if we’re honest – is countries (or states) which jockey for business through their tax strategies. Nevada has zero corporate tax. Luxembourg and Ireland offer tax breaks. Close those loopholes, and tax becomes – well, fairer?

Tim O’Reilly on Apple’s tax avoidance >> Google+

I can already imagine the comments of the libertarians and anti-tax advocates in the comments on this post. “Avoiding taxes is just keeping more of the hard-earned wealth you’ve created by being productive and successful.”

But I’d like to suggest a thought experiment. Imagine that you and a large group of friends, or an extended family, decide to hold a reunion or big party that requires renting a space and some real expenses. you agree to share the expenses equally. Then one of you says, “I’m getting us a discount on the hotel from my friend, so I shouldn’t have to pay my share.” Another two or three say, “I’m helping with the catering, so I shouldn’t have to pay.” Another: “I’m willing to act as designated driver, so I shouldn’t have to pay.” each time, you think, “Yeah, that’s reasonable.”

But before long, things get dicey.

a good comparison (once you make the “family” large enough). Another point: many technology companies have founders who are libertarian in outlook – that governments hinder rather than help society.

Apple’s response on its tax practices >> NYTimes.com

In response to the NYT’s article on its home and international tax avoidance practices:

Apple has conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules. we are incredibly proud of all of Apple’s contributions.

Microsoft forges ahead with new home-automation OS >> CNET News

In 2010, Microsoft researchers published a white paper about their work on a HomeOS and a HomeStore — early concepts around a Microsoft Research-developed home-automation system. those concepts have morphed into prototypes since then, based on a white paper, “An Operating System for the Home,” published this month on the Microsoft Research site.

The HomeOS is a “PC-like abstraction” for in-home devices, like lights, TVs, surveillance cameras, gaming consoles, routers, printers, PCs, mobile phones and more. these devices appear to the HomeOS user as peripherals connected to a single PC.

The white paper never explicitly says that HomeOS is derived from or based on Windows. (There are other operating system research projects and incubations at Microsoft, including Singularity and Midori, neither of which is Windows-based, so it’s not a given that HomeOS is Windows-derived.) But it was built using C# and the .Net Framework 4.0, the new white paper on the technology explained.

Sounds good. Next: execute it well.

Google and Oracle ‘experts’ clash over Android’s Java mimic >> Wired.com

The code used to run Java applications on Google’s Android operating system is “completely different” from the code that underpins Oracle’s Java platform, according to an expert witness called by Google in its ongoing court battle with Oracle over Android and Java.

“The implementation code in Android is completely different than the implementation code in Java,” Duke University computer science professor Owen Astrachan said on Friday, though he added that the two use the same “method signatures,” code that defines the inputs and outputs for part of a computer program.

…Astrachan’s testimony contrasted sharply with that of Stanford University processor John Mitchell, who was originally called by Oracle on Monday and returned to the stand on Friday. Mitchell said that at least in some cases, Google must have copied code from Oracle’s Java platform. “I don’t think there is any way [Google] could have come up with it on their own,” he said, when asked if he thought Google copied code for the Java application programming interfaces, or APIs.

Google says Dalvik is a “clean room implementation,” meaning it was built from scratch. But Mitchell disagreed. “Whoever inserted that code into the codebase had access to it,” he said. “This wasn’t a clean room implementation.”

How important is manufacturing? >> The Enlightened Economist

I spotted a chart showing the share of world manufacturing output accounted for by the leading industrial economies. The proportions are:

China 19.4%, US 18.2%, Japan 10.9%, Germany 6.1%, Italy 3.1%, Brazil 2.7%, S Korea 2.6%, India 2.5%, France 2.4%, UK 2.3%.

Surprising how much higher all those countries’ manufacturing quotas are.

“Might upgrade to the paid version someday”? no you won’t >> Marco.org

Mobile ads pay very poorly. in my case, ads didn’t even come close to delivering similar value as the $4.99 paid-app sale — I was lucky to get even $1 of value out of an Instapaper Free user. What I’ve heard from other developers and other ad networks suggests that this is pretty close to the industry average.

I decided to yield the free market to my competitors and discontinue Instapaper Free over a year ago, and my sales have remained healthy. (In fact, they’ve increased, but it’s difficult to know whether that was the cause.)…

This definitely isn’t an Android problem: it’s a user problem. Maybe a significantly larger percentage of Android users insist on free apps than iOS users (it certainly seems that way). But both platforms have much larger demand for free apps than paid apps.

Make background music for when you work >> Incredibox

Enormous fun. (Requires Flash.)

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Boot up: Apple’s tax schemes, Microsoft’s HomeOS, Google v Oracle redux and more

Plus Apple can intervene with Lodsys, Instagram’s real acquisition cost, World Bank v Google and more

A quick burst of 8 links for you to chew over, as picked by the Technology team

If Google’s really Proud Of Google+, It Should Share Some Real User Figures >> MarketingLand

Danny Sullivan, in a long, long post:

I’ve been meaning to write my “Google+ is Like the Apple Store for Google” piece for some time. maybe I’ll never get to it now. but you know when you go into an Apple Store, and it’s filled with sometimes scary Apple fanatics who seem to have arrived at a holy place? That’s Google+ for Google.

if Google+ isn’t anything else, it’s a place that Google fans can call home. It’s a place that Google’s never really had before, a spot for its millions (and let’s face it, there are millions) of fanboys and fangirls to rejoice in all things Google.

I’ve experienced this firsthand in my time at Google. I’ve learned that if I share anything negative about Google, I can expect to get comments, sometimes many, asking why I hate Google or am biased against Google.

Sullivan generally writes positively about Google, and you can see how wrestling with his dislike of its slipperiness over Google+. the “170m” figure this week seems to have been the last straw, and won’t have been improved by the complete lack of useful numbers in Thurday’s quarterly results.

DOJ is likely to lose e-book antitrust suit targeting Apple >> CNET News

The Department of Justice “has a far better case against the publishers than Apple,” says Dominick Armentano, professor emeritus of economics at the University of Hartford and author of Antitrust and Monopoly who’s now affiliated with the Independent Institute in Oakland, Calif. “If the CEOs of the various publishers got together in hotel rooms to discuss prices, they are sunk” and might as well settle, he says.

Pretty much only leaves MacMillan to have to fight, then.

The World Bank demands open data in Google mapping project >> Publish what You Fund

The World Bank has confirmed that it will not support the use of Google Map Maker for citizen-mapping efforts unless it gives users free access to the map data they create.

the World Bank and Google have launched a project using crowd-sourcing to populate maps with the locations of public services in the developing world – a resource which could be used by many different groups in humanitarian and longer-term development work.

Good move by the World Bank.

How Samsung beat Nokia >> asymco

Horace Dediu cuts to the chase:

Looking at product mix, Samsung growth is shown to be almost entirely due to smartphones while Nokia’s stagnant growth seems to be a failure to have any smartphone traction.

It’s even more clear when showing the above mixes of devices as percents of total.

Note that it’s not as simple as “Android”: HTC, Motorola, LG and Sony Ericsson have all adopted Android too, but all dwindled (some even worse than Nokia). Samsung has stayed ahead of the curve. its success is completely deserved.

Inside Foxconn: Exclusive look at how an iPad is made >> YouTube

Rob Schmitz (who was one of those suspicious about Mike Daisey’s claims about Foxconn working conditions) gets inside a factory and gets filming.

Instagram’s Buyout: how Does It Measure Up? >> Waxy.org

The spreadsheet below captures the acquisition date, dollar amounts, and ballpark counts of the users and employees at the time of acquisition. be warned: any of these numbers are very rough, cobbled together from Internet Archive searches, old news articles, Quora answers, and tech blogs. if you have more accurate information, please leave a comment and I’ll fix it.

Upshot: Instagram is a long way from being the most expensive purchase on a per-user basis from the past 13 years. To repeat: Instagram isn’t the purchase that marks the top of the bubble. It’s part of the bubble.

About Java for OS X Lion 2012-003 >> Apple

This Java security update removes the most common variants of the Flashback malware.

this update also configures the Java web plug-in to disable the automatic execution of Java applets. Users may re-enable automatic execution of Java applets using the Java Preferences application. if the Java web plug-in detects that no applets have been run for an extended period of time it will again disable Java applets.

Next step: just zap Java altogether. Works on 10.6 and 10.7. Users of 10.5… should disable Java?

Apple is allowed (at long last) to intervene in Lodsys lawsuit against app developers >> FOSS Patents

I wish the app developer community luck as far as Lodsys is concerned. I saw that some of the smaller defendants, including Iconfactory, settled the dispute on undisclosed terms, presumably because they couldn’t afford the cost and deal with risk of protracted litigation. I wish the remaining defendants as well as all those facing the threat of being sued that Apple’s intervention will help to get his troll defeated. I also hope that Google’s reexamination requests will be successful. I still believe that those large players should do a whole lot more for app developers than what they are doing at this stage (for example, I believe they should give them blanket coverage against litigation costs)

let the games really begin.

You can follow Guardian Technology’s linkbucket on Pinboard. To suggest a link, either add it below or tag it with @gdntech on the free Delicious service.

Charles ArthurJosh Hallidayguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. all rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

Boot up: the Google+ Store?, DOJ v Apple, how Samsung beat Nokia, Flashback fix and more

Editors’ note: This is a guest column. see Roger Entner’s bio below.

One thing is clear about Clearwire: no matter what happens, it needs Sprint more than ever.

Just look at 2011. the 4G WiMax service provider’s best news was the increase in subscribers, from 4.4 million to 10.4 million. Impressive as that was, it came solely on the back of Sprint.

With growth like that, and lingering fears about its survival, you’d think Clearwire would play nice. but Clearwire played a high-risk game of chicken with Sprint during negotiations to extend its resale agreement, and now it’s in a bigger mess than ever.

This ill-advised negotiations tactic pushed Clearwire and Sprint to the brink. as both companies insisted the other needed them more, the deal wasn’t closed until the very day Clearwire could have gone into default in December.

As if that wasn’t enough excitement, the next day, half of its strategic investors — Comcast, Time Warner Cable, and Bright House — decided to stop selling Clearwire services and provide Verizon services instead. Not exactly a vote of confidence.

Could things get worse? Of course. Just a few months later, Google, another strategic investor threw in the towel. Google sold its $500 million initial investment for $66.5 million to Credit Suisse, Bloomberg reported.

How did Clearwire get into this messFirst, let’s look at how it got here. In early 2011, things looked pretty good for Clearwire. Sprint’s 4G WiMax devices were adding more than a million customers a quarter — a well-needed boost for both companies. Extending the WiMax wholesale agreement between the two companies was a priority. Clearwire knew that its WiMax network gave Sprint an advantage so Clearwire thought it had Sprint over a barrel.

So it pushed for a nonsensical premium from Sprint rather than the more appropriate market rate or slight discount. the negotiations continued on and on for months. There was no progress, with two important deadlines looming: Sprint’s Network Vision investor conference on October 7 and a large Clearwire interest payment on December 1.

October 7 came and Sprint had to announce that it hadn’t renewed the contract with Clearwire. In a fit of hubris, Clearwire thought Sprint would be forced to agree to its terms to save its 4G strategy (and regain Wall Street credibility). although Sprint’s share price did drop, Clearwire’s all but collapsed because Sprint presented a 4G strategy that didn’t critically rely on Clearwire beyond 2014.

In the next two months, as a possible debt payment default by Clearwire approached, Clearwire realized it needed to make a deal. Sprint was its only option. so they inked the new agreement, which enabled Clearwire to make a huge debt payment. the result is pretty good for both companies. Sprint will pay Clearwire a fixed $926 million for unlimited WiMax access for its customers. (In the old agreement, it had to pay by the megabyte.)

Sprint also will pay Clearwire for bandwidth to its TDD-LTE network — a variant of the 4G LTE network used by Verizon Wireless and AT&T — if Clearwire gets its network up in time. With this new agreement in place, Clearwire avoided bankruptcy and acquired additional funding. With a 49 percent voting share (54 percent ownership stake), bankruptcy would have been inconvenient and might have presented some PR challenges for Sprint, but not been lethal for Sprint.

Clearwire’s last remaining strategic investor, Intel Capital, seems to have forgotten it still owns a part of Clearwire. It neither bailed nor participated in the refunding of Clearwire. Intel’s initial intent was always obvious: create a showcase for a successful WiMax operator and make WiMax a global standard. after all, WiMax is essentially an Intel invention. Now that Clearwire is moving to using TDD-LTE, the WiMax play in the U.S. appears to have withered on the vine, and with that it is only a matter of time until Intel will sell its strategic stake in the company.

Is there any way for Clearwire to get out of this bind?So, after a year like that, how can Clearwire get on track? Clearwire has made an important first step by being able to win Leap Wireless’ Cricket as an additional client. the remainder won’t be easy, because Clearwire has to add TDD-LTE to its current footprint rapidly. This will make it worthwhile for Sprint, Leap Wireless, and other operators to get on board.

Clearwire has even been able to persuade Wall Street and Sprint to invest billions more in it. It will also need to get the handset manufacturers on its side. Sprint has committed to help Clearwire develop TDD-LTE devices and Clearwire has just agreed with China Mobile, which uses the same technology, to work together on devices.

For operators and manufacturers, it’s all about economics. and it will only make sense for them to include Clearwire-compatible electronics in their devices if the network is widely available. the end of Sprint putting new customers on Clearwire’s WiMax network is in sight. With the iPhone 4S at Sprint, it added 1 million customers in the fourth quarter 2011, half the number added the previous quarter.

Even if Clearwire is doing everything right, there is the regulatory risk nobody is talking about: the FCC is developing a track record of being utterly unpredictable. consider what happened with LightSquared. In roughly a year’s time, the company went from being the FCC’s choice to create a fifth national wireless provider to being the company that got its regulatory approvals put on hold by the FCC.

And let’s not forget about Dish. the FCC has pulled the rug out from under Charlie Ergen’s Dish by deciding, after months of comments and negotiations, to wait until after the November presidential election before it lets Dish know if the company can use its MSS spectrum to provide terrestrial wireless broadband services. At a minimum, the FCC is proving it is unpredictable.

How is this relevant to Clearwire? In the FCC’s wireless competition reports, the agency appears to view only half of Clearwire’s spectrum as suitable for wireless broadband.

Why? There’s no clear explanation. If the FCC truly believes only some of Clearwire’s spectrum is suitable for broadband, will the FCC try to reclaim it or bar Clearwire from using it to support wireless broadband? No one knows except the FCC, and that could present a very real risk to Clearwire.

With all of this, will more investors come forward to fund the remainder of Clearwire’s network build out?

Why Clearwire needs Sprint now more than ever

Today’s mobile roundup features the EU antitrust probe on Motorola Mobility, iPhone 5 in June, more news regarding the Android platform and more.

iPhone 5 by June?

During an interview in a Japanese TV show, a Foxconn recruiter let slip that they are now hiring more workers in preparation for the June launch of the iPhone 5.  Well, if this is true, Apple must be pissed at the Foxconn recruiter since the company is known for keeping everything in lockdown until the time is right.  But, in the recruiter’s defense, it looks like he was oblivious that he was being interviewed.

Motorola under scrutiny from EU

Apple inc. and Microsoft Corp. filed separate complaints against unfair licensing conditions and abusive litigation by Motorola Mobility and the European Union officially began their antitrust investigation of the two cases.

The EU will investigate as to whether or not “Motorola has failed to honor its irrevocable commitments made to standard-setting organizations” to license its technologies to other companies on fair, reasonable and non-discriminatory terms.

This could possibly hinder the Google-Motorola acquisition, which is currently is in its final stages.  And if ever the deal was approved, any wrong doings of Motorola or Google will not be exonerated.

Google bits and pieces

Did you know that in 2011, Google only made $1.70 per Android device sold?  This is dwarfed by Apple’s $576.30 per iOS device sold.  But some argue that you can’t expect Google to earn much directly from Android since it’s a free platform, and that their revenue come from ads.  Oddly enough, Google still earns more from iOS devices than Android when it comes to ad revenue.  Simply put, Apple is making Google rich.

While Google’s reach stretches beyond its own OS, the search giant still faces a long-standing legal battle against Oracle.  The two companies appeared in court in the hopes of arriving at a settlement to finally end their patent infringement dispute.  Unfortunately, the six-hour long settlement meeting wasn’t fruitful and they’ll soon be meeting in court for the trial proper.

“Despite their diligent efforts and those of their able counsel, the parties have reached an irreconcilable impasse in their settlement discussions,” U.S. Magistrate Judge Paul Grewal said in an order filed Monday.

“no further conferences shall be convened. the parties should instead direct their entire attention to the preparation of their trial presentations. good luck,” Grewal said.

In other Google news, the company’s revealed the latest numbers for Android OS market break down, showing that Ice Cream Sandwich is slowly rolling out to compatible devices and now comprises 2.9% of the market, much to the delight of Fandroids.  Still, the Gingerbread version is the most used/popular version of the platform at 63.7%.

Samsung delays tablet release

Both versions of the Samsung Galaxy Tab 2, the 7 and 10.1 inch were expected to arrive in the UK market last month, but Google and Samsung figured they still had a lot of things to work on regarding the Android Ice Cream Sandwich platform and the Galaxy Tab 2 device.  The tablets are now scheduled to arrive at the end of April.

Will Apple Release the iPhone 5 in June?