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Thursday, February 26, 2009

Apple vs. Palm: Geeks with grudges

iPhone v. Pre
[Originally posted Jan. 26, 2009 on]

The bad blood between Apple (AAPL) and Palm (PALM) that bubbled to the surface last week has a history that long predates Palm's launch of the Pre, a smartphone that flatters Apple more sincerely than any of the other iPhone imitators.

When asked at Apple's earnings call last Wednesday how the iPhone was going to going to stay ahead of competitors nipping at its heels, you could hear the heat in acting CEO Tim Cook's answer.
"We think competition is good. It makes us all better. And we are ready to suit up and go against anyone.
"However," he added, his voice rising, "we will not stand for having our IP [intellectual property] ripped off, and we'll use whatever weapons that we have at our disposal. I don't know that I can be clearer than that." (link)

Palm was quick to respond to what it perceived as a shot across its bow.
"If faced with legal action," a spokesperson told Digital Daily, "we are confident that we have the tools necessary to defend ourselves."

But the bad blood between Palm and Apple goes deeper than a patent dispute, as my colleague Brent Schlender presciently pointed out when the venture capitalists at Elevation Partners made their first big investment in Palm -- a $325 million cash infusion just a few weeks before the iPhone hit the market.

In a column written at the time of the loan, Schlender noted that both the giver -- Elevation partner Fred Anderson -- and the receiver -- Palm executive chairman Jon Rubenstein -- had long, complex relationships with Apple.