Here’s What the VirnetX Lawsuit Means for Apple Technology
VirnetX (AMEX:VHC) clearly won its patent-infringement suit last year against Apple (NASDAQ:AAPL), which was held up through appeal. In fact, a judge guaranteed the case would never come back to court. VirnetX promptly doubled down, saying the same patented VPN technology Apple used for iPads, iPods, iPhones and other devices applied to more recent Apple devices as well. $368 million later (and counting), Apple will be updating its technology to accommodate necessary changes to models equipped with iOS 6 and any later OS.
The problem stems from the way Apple’s FaceTime uses VPN protocol on its systems. VirnetX developed a way for VPN On Demand service to continue until a connection was established, and Apple liked the concept so much developers applied it to countless devices. However, that will all change in the coming month, when Apple releases an update using a different system for its roster of computing devices.
The change was necessary to move forward following the convincing VirnetX win. The original ruling came down in November, when Apple’s stock was above $540. Its decline has been steady since that time, with Apple dropping over 2o percent in value. As of Friday, it was just over $422. Yet Apple also received good news on the smartphone front this week…
The latest comScore report indicates that consumers are preferring the iPhone over Android devices. The only advantage for Google (NASDAQ:GOOG) in this department remains the range of smartphones using Android technology. Otherwise, it appears Apple will continue gaining ground and has the potential to take over Google for position as the top U.S. smartphone provider. As the Galaxy 4S becomes less of a novelty, those numbers could increase.
In the meantime, analysts are waiting for an Apple announcement about a possible iRadio platform. With Pandora (NYSE:P) looking vulnerable during record label negotiations, most analysts see a huge opening for Apple. The company could potentially undercut Pandora’s price per song and add the hefty weight of iTunes to score a crushing defeat. Apple is wisely taking care of its VirnetX problem now, so the announcement of iRadio comes with all positive news attached.
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