Apple has gotten vigilant in protecting its pioneering iPhone turf on the open frontier of the mobile Internet. But the patent infringement lawsuits against phone makers Nokia ( NOK) and HTC are looking like a warm-up skirmish before the big showdown with giants Google and Microsoft.
Apple is squaring off against "potential heavyweights" that want to make "iPhone-like" devices, says Oppenheimer analyst Yair Reiner in a research note. But Reiner warns that Apple may be in for a flogging. "Together, these companies bring to bear an impressive arsenal of intellectual property, money, and public relations savvy, and with it,the ability to administer considerable pain," Reiner writes. The concern is that Microsoft's Windows 7 mobile operating system has the iPhone's market in its sights and that Microsoft has a deep background in software patents to back it up. One worry for Google is that Apple's legal battle with HTC may weaken the momentum of Android-powered phones. This is a particularly sticky issue at Motorola. The phone shop's partnership with Google, already strained by the introduction of a competing Google-branded Nexus One phone, may weaken under an Apple patent dispute, causing the phone maker to form ties to other operating systems. Enter Microsoft Windows Phone 7 and what could be Microsoft's last big chance to get its software on mobile devices. Having been displaced by Apple and Research In Motion's ( RIMM) BlackBerries, Microsoft needs to rekindle deals with phone makers that may be interested in building phones on Windows software. But Microsoft isn't willing to leave all the development of Windows mobile phones to the phone makers. As TheStreet exclusively reported, Microsoft is working on its own touchscreen phone with Asustek, the Taiwanese computer maker. Apple may have helped to put a speed bump in front of Google's Android effort, but it may take a lot more effort to get Microsoft off its path. "Now that it has demonstrated its willingness to fight and begun to benefit from that demonstration, Apple may do well to return to saber rattling," Reiner writes. --Written by Scott Moritz in New York.