Nokia's fight with Apple over patents is no doubt mostly about cross licensing and payments, but the legal strategy could have a significant PR impact. In short, Nokia has an image problem - how could a lawsuit possibly help?
First, some background.
Apple's Market Entry
Apple is a master at polishing technology to the point where it appeals to the average user. It did not have the first mp3 player, nor did it have the first music store, but the iPod was so much more user friendly - and pretty - that it made the market explode. In fact, it became so popular that the word iPod has become virtually synonymous with portable music players.
Good for Apple. And it managed to repeat the design success with the iPhone. Nokia's first attempt at a touchscreen phone failed in 2004, but Apple waited until the technology was good enough and came out with a product free of legacy software with perfect timing. The iPhone was the first smartphone that was user friendly enough for the average user to seriously consider browsing the internet on the go. Again, the market started growing.
It's a Rectangle With a Screen
But this time around, Apple created a serious image problem for the other manufacturers. Smartphones are much more complex than music players, and apart from the less than perfect user interfaces, the industry was developing pretty well without Apple. However, because Apple was the one to reel in all the smartphone newbies, many were left with the impression that they first saw all the features in an Apple product. When the other manufacturers finally got around to improving their UI, it looked like they were copying Apple at every level.
Then, people used to the iPhone's simplistic UI failed to notice the extra features offered by other phones. What a dilemma. Either copy the UI directly and be derided, or make a differently good one and people won't want to learn it.
For Nokia, this was ten times worse, because its recent smartphones had been failing in the US as a result of bad relations with local operators. Who was going to buy a full priced unlocked phone when all service contracts still included the device cost? Now, operators like T-Mobile are finally starting to at least partially drop the credit payments from their monthly rates, but just as Nokia gets the chance to reenter, it's suddenly seen as a new entrant, desperately trying to copy the iPhone (or RIM, see the E72).
In truth, Nokia has countless variations of phones, and these two only represent a small fraction of the form factors. And how many different kinds of rectangles covered with a large screen can there be?
Reporters and celebrities, let's face it, are rarely computer nerds. The popularity of the iPhone in its own niche thus resulted in plenty of free advertising - to the point where people would say "on your iPhone, you can access our mobile version" rather than "on your phone".
Nokia is not without blame. The S60 Symbian user interface was nearing end of life, and aging technology had to compete against Apple's brand new designs. Managers obviously thought they had more time to code new software than they did in reality. Still, in the rest of the world Nokia enjoyed all the benefits of an old platform: backwards compatibility, user familiarity with the UI (legacy quirks and all), widespread support, etc. None of these concerns are without merit, and S60 is much better on non-touch phones, so it continued to be a well liked alternative and market share leader.
But here's the critical part: much of the world's tech media is based in or is influenced by the US. The US media, in turn, wrote about the iPhone as if Nokia's smartphones had never existed (because, to them, they hadn't). Absurdly, the world's largest and arguably most full-featured phone manufacturer started being talked about as if it were a niche player.
The message started sinking in: Nokia had bad products, and any new ones were just a response to Apple - bad copies at that. And the iPhone was only $99 when Nokia's products were up to $600! (The former is only the first credit payment, of course.) This kind of publicity will affect the whole product line, and taint even the very good <$200 touchscreen models Nokia offers, for which Apple has no alternative. Fortunately for Nokia, the <$50 keypad models sell themselves, but all the discounting due to perceived lack of value explains why margins have been shrinking drastically.
Of course, Nokia never really stopped innovating. Maemo 5 is already in a league of its own, and Symbian is getting a completely new UI in several stages during 2010, to better compete with Android and Apple. But how is it going to shrug the image of being an uninnovative copycat?
Trolling for the Right Headlines
What would have happened in the press if Nokia and Apple had resolved their patent dispute this year? Nothing. Maybe a couple of press release regurgitations about cross licensing agreements. Now that we're hearing about the lawsuits and there's a dramatic battle, we can expect big headlines if Apple is forced to concede anything even on sweetened terms.
And those headlines will matter a great deal to Nokia. Maybe Apple didn't invent the wheel after all. How could a simple copycat have amassed such a mountain of patents? Maybe there's something to Nokia after all, people will say. And Nokia will be waiting with an army of Maemo 6 and Symbian^3 (^4) products, ready to impress with 2010-level, completely new user interfaces. What's S60?