Apple's Lawyers Get Busy

Apple became the world’s most valuable company for a brief period yesterday, overtaking Exxon whose value had dipped on the back of the depressed oil prices.

Those two should continue to duke it out as Apple posts record results, and oil prices inevitably rise.

However, Apple’s celebrations may have been short-lived as Amazon came up with a clever way to circumvent their rules on in-app purchases.

Today, Amazon released the Kindle Cloud Reader. Essentially, this is a snazzy version of the Kindle reading app, but the key difference is that it’s browser-based. This means that iPad owners will be able to read books, and browse for new purchases, all in the same web-based program.

They will no longer have one app where they read Kindle books, and then have to go through the (relatively) cumbersome process of opening their browser and navigating to the appropriate page before they can make their purchase. It’s now seamless (just like it was before Apple finally enforced the new rules about in-app purchases).

It also means that Amazon can sell books through the Kindle Cloud Reader without having to fork over 30% to Apple. And, of course, it’s a blow to Apple’s strategy to force its users to use their mediocre iBookstore.

At the moment, the Kindle Cloud Reader will only function on Chrome or Safari browsers, and will only work with the iPad rather than the iPhone, but this should change soon.

I have only tested this in my browser, but it’s very snazzy, and is clearly aimed at tablet lovers. I haven’t tried it on the iPad, but TechCrunch gave it a glowing review.

It’s a very smart move from Amazon, and we can expect Sony and Kobo to follow suit. Whether Apple have any way to retaliate remains to be seen.

They are facing battles on all fronts – that’s what happens when you are top dog. Amazon are widely expected to release a tablet in September/October. Details have been hard to come by, but most analysts expect a similar spec to the iPad, but for it to be priced at least $50 cheaper.

But there are lots of other tablets both on the market and in the pipeline. Samsung are another company with $100bn revenues that are keen to exploit this market. Their line of Android-based Galaxy smartphones and tablets have come under criticism from Apple, who have lodged several complaints of patent violations.

Today, Apple won the first round of what is bound to be a lengthy legal battle, spanning several jurisdictions. A regional court in Dusseldorf issued a preliminary injunction barring the sale of Samsung’s latest model – the Galaxy 10.1 – in the EU.

Samsung were caught by surprise, claiming that the injunction was filed without notice to them and that they weren’t a party to the hearing. I would imagine that this is a temporary hiccup, and the tablet, or some slight variation of it, will be on sale shortly.

In any event, this is part of a much larger battle between all the smartphone manufacturers – as well as Google, Apple, and Microsoft – about patents, that could take forever to play out. It will be interesting to see if Amazon gets drawn in when their tablet is released. One thing is for sure, Apple’s lawyers will be hovering while Apple’s engineers take apart the device.

Apple themselves were caught by a surprise legal maneuver. A law firm called Hagens Berman has launched a nationwide class-action lawsuit against them and five major publishers (HarperCollins, Hachette, Macmillian, Simon & Schuster, and Penguin) claiming that they illegally fix the price of e-books.

It’s not sure at this stage if the suit has any legs. However, that same law firm are also investigating the claims that some large publishers are under-reporting e-book sales, shorting their authors their rightful share of royalties, probably with one eye on another class action suit.

Again, it’s unclear at this stage how far this will progress, but if it does, Apple, and especially the major publishers, could be tied up in a long-term, messy, and expensive legal battle.

Interesting times.