Pando

The Enemy of My Enemy Is My Friend: Apple Needs to Take Care of Google Before It Goes After Amazon

By Trevor Gilbert , written on August 28, 2012

From The News Desk

With all of the hoopla surrounding Apple’s decisive victory over Samsung last week, there has been nary a mention of what the company should do next. Having a proven narrative that juries clearly relate to, it has one of the strongest legal positions in the technology industry right now.

Because of this strong position, it would seem to make sense for Apple to kneecap one of its biggest competitors, Amazon, before it gets too strong. However, according to several people I talked to, it’s in Apple’s best interests to play the waiting game for now.

There’s one obvious motivation for Apple to go on the offensive, as demonstrated by its lawsuits with Samsung, Motorola, and HTC -- Apple believed that these companies were eating into its profits. The motivations for suing may have been cloaked in the shroud of protecting innovation, but make no mistake about it, Apple sues when there is a competitive threat. After all, Apple didn’t bothering making a stink over the JooJoo Pad.

And from that point of view, it makes sense for Apple to keep its eye on Amazon. Amazon has an incredibly strong foundation to compete with Apple. It has the strongest content library outside of Cupertino, it has the distribution channel of Amazon.com to compete with Apple Stores, and it has the developer ecosystem on its side with tight integration with Amazon Web Services. The only thing that Amazon doesn’t seem to have, though, is a killer product. (That’s only a matter of time, in all likelihood.)

This foundation will all tie together in the future, when Amazon pushes into the smartphone space and further into the tablet space. After all, Amazon will need more proprietary devices to provide “all of the world’s content” at a low price, as its mission statement claims.

In the meantime, though, Apple’s focus should remain on Google. Google runs the Android ecosystem right now, and Android is still the biggest threat to iOS, courtroom losses and all. Independent mobile analyst Horace Dediu backed up this claim by telling me, “Amazon is a bigger threat to Google than it is to Apple. So I think Apple will leave [Amazon] alone, at least as long as Google is still their main concern.”

What this means is that Amazon is currently holding Google in check while Apple fights them from a different angle. This sentiment was echoed by Jim Dalrymple of The Loop, when he told me, " I think the relationship will remain on good terms as long as Amazon doesn't push things like using Apple's trademarks for 'App Store' or other items."

In the long-term, Apple will likely end up having to fight Amazon in the courtroom. But it will be worth it for Apple to be patient. After all, there’s no point in fighting a war on two fronts without provocation. For now, Apple has Amazon on its side against Google in a “enemy of my enemy is my friend” kind of way.

This isn’t a new strategy. Larry Ellison was known to have taken a similar strategy as he built up Oracle. Ellison plays the long game in the enterprise software industry, coldly calculating his moves as he knocks down, acquires, or squashes competitors. This strategy could lend itself well to Apple, as it looks down the road. Eventually Apple could take on Amazon in the market and in the courtroom, but in the meantime the threat is Google-Motorola, and that’s what needs to be addressed. If Amazon can help with that, then there’s no reason to take on an ally before need be.

All of this is to say, don’t expect Apple to sue Amazon tomorrow. But at some point in the near future, if the execs at Cupertino are paying attention to the enemy in the north, there will need to be licensing talks, and if all else fails, litigation. But it should be slow, steady, and according to a long-term plan. As Dediu old me, “Litigation is not a weapon used lightly.”