“Do these patents all belong to that Android company?” Jobs asked gravely. He had only recently learned of Android.
Although Android had been established years ago, it had rarely applied for smartphone-related patents and had conducted no publicity, so Jobs had paid no attention to such a company.
Even though Android’s executives frequently gave speeches and revealed many ideas about smartphones, Apple had never paid them any mind. After all, in Silicon Valley, smartphones weren't a particularly unique concept; in fact, quite a few companies had proposed the idea of an intelligent mobile phone.
But proposing an idea and diligently pursuing it were entirely different matters. Given the doubts about the commercial prospects of smartphones, almost no company would invest in them. Many small companies died out during development and were not worth paying attention to.
Apple only needed to focus on its own work.
However, they never expected that this Android company would create such a stir by applying for over a thousand smartphone-related patents, some of which directly blocked Apple's path. After all, there was often only one reasonable and cost-effective solution, and it was quite normal for Apple and Android to arrive at the same ideas.
Now, Android stood directly in Apple's development path, leaving Apple in a difficult position.
“Sir, we currently have a total of 39 patents registered by Android. These are patents that we cannot bypass cost-effectively in a short period!” the secretary said softly.
“Android… I recall this Android is likely Huang He’s venture!” Jobs tapped his desk. “Our cooperation with Jiangnan Group is progressing well. Apple is one of the first purchasers of Jiangnan servers, and we have a good relationship with Jiangnan. Please contact Jiangnan Group and see if they are willing to sell these patents to us!”
“Sir, our people have already contacted Jiangnan Group, but they informed us that these patents belong to Android and suggested we negotiate with Android directly, not with them,” the secretary shook his head.
“This is a game of buck-passing!” Jobs sighed. Jiangnan Group was not foolish. They couldn't possibly fail to see the value of these patents and the future of smartphones. Jiangnan Group clearly intended to enter the market in the future, and they would not let this opportunity pass to sell these patents to Apple.
“However, according to our investigation, the patent applications are in a frozen state,” the secretary added.
“Frozen state? What does that mean?” Jobs immediately asked.
“The Patent Committee decided that until Andy Rubin is judged, these patents cannot be confirmed as Android’s. Therefore, these patent applications will remain in a frozen state until the court makes a ruling on Andy Rubin, confirming his guilt and definitively granting ownership of the patents to Android Company!”
“How can something so absurd happen!” Jobs was stunned. While Andy Rubin had indeed been arrested, he had not yet been sentenced. But the problem was, since Andy Rubin developed these patents while serving as Android’s chairman, the patents undoubtedly belonged to Android Company. The Patent Committee freezing patent applications for this reason was as comical and unreasonable as deciding a person’s gender was uncertain because they psychologically questioned whether they were male or female, and therefore designating them as genderless, allowing them to enter either the men’s or women’s restroom.
Well, Jobs was unaware that this was the work of their Goldman Sachs Group. After all, as long as the patents were frozen, news of their early patent applications would also be frozen, preventing Jiangnan Group from discovering that their patents had already been applied for in advance by Goldman Sachs’s company.
However, this was the best news Jobs had heard.
Jobs rubbed his temples, glanced at the document in his hand, and then his eyes darted as he narrowed them and said, “If an undecided state means that the ownership of these patents cannot yet be determined, then even if we use these patents, no one can sue us or prevent us from using them! Is that right?”
“I’ll go consult,” the secretary immediately said. After consulting with Apple’s legal counsel for several hours, he returned and reported, “Yes, according to our legal counsel, as long as the court has not made a ruling, the ownership of the patents cannot be determined. And before ownership is determined, the patents will not be effective. Therefore, using the patents while they are not effective will not constitute infringement. So, we can actually use these patents at this time!”
“But once the court rules, and the Patent Committee begins patent confirmation, we will no longer be able to use these patents!” the secretary concluded.
Although this conclusion was less than a hundred words, it was the result of his and the lawyers’ discussions for several hours and extensive research into relevant legal documents.
“Can mobile phones produced during the period when patents are not effective be sold normally?” Jobs pressed further.
“Yes, as long as we can prove the specific production dates of those phones to the court, we can avoid legal risks,” the secretary said.
“Phew, that makes things much easier!” Jobs’s face finally broke into a smile. “Order the production department to stop worrying about these damn patents. I want them to finalize the design within a week. Additionally, the production and procurement departments must complete all component production and procurement, as well as the crucial product assembly, within a month!”
“I require the first iPhone to roll off the production line three months from now, and then produce over 300,000 iPhones by the end of this year. This will essentially meet market demand. Even if these patents gain ownership in the future, we will not be considered patent infringers!”
“Furthermore, the technical department must now start working, regardless of cost or effort, to find ways to circumvent all these patent obstructions, so that our second-generation product will not need to consider these patents!” Jobs said.
“Sir, there will be a problem here!” the secretary hesitated for a moment before saying, “We must reach an agreement with Jiangnan Group, otherwise your orders will be difficult to fulfill!”
“What does Jiangnan Group have to do with this?” Jobs asked, his head aching.
“It's regarding production. You know, our company has never had its own production lines; all products are manufactured by other companies. Currently, 69% of our components are supplied by companies under the China International Electronics Technology Industry Development Alliance, controlled by Jiangnan Group.”
“This is for PC components. For mobile phones, which require more refined products, we may have to rely on the China International Electronics Technology Industry Development Alliance for the production of 80% of our components. In this case, Jiangnan Group’s attitude becomes very important. If Jiangnan Group learns that we are producing heavily during the window when their patents are not yet effective, I fear they will obstruct us in this regard, preventing our production speed from meeting the planned schedule!”
“They don’t even need to directly refuse us. By using their influence, they can order some companies to delay deliveries or postpone production progress, making it unbearable for us.”
“Has this Jiangnan Group reached such a point? They are directly strangling us!” Jobs himself was somewhat dumbfounded.
Jobs himself was only responsible for product design and never managed the actual production of products. These were all directly handed over to the professionals below, as Jobs’s main focus should be on those brilliant product designs, not on time-consuming production.
This resulted in Jobs not paying too much attention to his company’s supply chain. Moreover, Jobs had been recovering from illness for the past six months, almost completely detached from company management, only controlling the company’s most important development direction. Now that he was gradually resuming many daily affairs, he had even less time to review his company’s supply chain data.
After all, Apple’s entire supply chain had always been very smooth. And since the China International Electronics Technology Industry Development Alliance took over the majority of the supply chain, Apple’s supply chain had encountered almost no problems, operating even more efficiently than before. This had put everyone at Apple at ease, and they had never considered the possibility of the supply chain experiencing issues.
Only now did Jobs realize that, unknowingly, Jiangnan Group had actually gained control of their throat… no, almost the entire electronics industry’s throat. After all, if a company controls 80% of the industry’s supply chain, that company is essentially invincible.
“There’s no better solution for this for the moment. Let’s order as much as possible and build up inventory!” Jobs said after a moment of silence, only able to come up with this less-than-ideal solution.
But this feeling still made Jobs uncomfortable. As a seasoned entrepreneur, his intuition told him that a situation where the entire supply chain was controlled by an opponent was extremely bad. Otherwise, if the opponent decided to leverage the supply chain against them, the impact on Apple would be nearly devastating.
He had to avoid such a situation. Of course, this was not a problem Apple needed to consider right now. The priority was to get the iPhone to market as quickly as possible and become the world’s first groundbreaking smartphone.
What Apple didn’t know was that in a city hundreds of kilometers away, a few people were also considering smartphones, though they referred to them as PT.
“Sir, according to our latest news, Jobs has ordered the direct disregard of patent restrictions, using the window before patents become effective to make the iPhone the world’s first PT,” a secretary reported to an elderly man.