Apple pulls Nokia’s Withings health product line from stores

https://9to5mac.com/2016/12/23/like-bose-apple-pulls-nokias-withings-health-product-line-from-stores-in-wake-of-patent-dispute/

by electic • 10 years ago

51 30 10 years ago

9to5mac.com

jdpedrie2• 10 years ago

Apple hasn’t pulled the Withings apps from the App Store yet but it probably wouldn’t hurt to download them if you think you will need them…just in case.

Pulling the app from the app store strikes me as a whole different ballgame from removing the product from the apple store. Seems like that would cross a line from fairly normal tactics into essentially bricking devices for a large segment of customers.

matco11• 10 years ago

Technically, it would not brick the devices, because installed apps would continue to work. Only new installations for newly purchased devices would not be possible.

Nevertheless, I would agree it would be a stronger/harsher manouver by Apple.

Would it be a proportionate action to what Nokia is/has been doing? Well, maybe. Reading about Apple's side of the story, it seems Nokia has already crossed more than one line into harsh/unfair legal/business tactics. ...So, certainly it's hard to predict what Apple is going to do.

The interesting thing here is that if you assume that Withings is making $50-60mm/year in revenues (my guess - based on the $192mm sale price earlier this year on one side, and the estimated number of app downloads and the price of their devices), spread across so many devices, they are probably little/not profitable and little/not cash-flow generating.

So, if the assumption above is correct, Withings would be a small/insignificant casualty for the Nokia side, in the context of this patents war, where much bigger money is at stake.

jdpedrie2• 10 years ago

Only new installations for newly purchased devices would not be possible.

That's a good point, and definitely true. That is probably even worse for Nokia though. If existing users can continue relatively unaffected, but new customers are essentially out of luck, the platform is totally choked off from any growth. Without the app, I don't see how they could do anything other than stop selling the product.

I'm not familiar with the particulars of the dispute between Apple and Nokia, but it's pretty scary how wide ranging the collateral damage from this sort of thing could be.

mamp• 10 years ago

Apple did not pull Bose apps from the App Store when they pulled their products from the Apple Stores during their dispute. Hasn't happened.

simonh• 10 years ago

That would be counterproductive because it would punish customers, but not actually punish Withings themselves. After all, anyone downloading the app has presumably already bought a Withings device. So Apple could only get grief for doing this without getting any benefit.

audeyisaacs• 10 years ago

Surely even the possibility of this happening being talked about in the press materially damages Nokia's business.

Really hope the users' right to install software on their device gets regulated soon...

philipov• 10 years ago

When the user's right to install software gets regulated, odds are it will be to formally remove that right. That kind of right is incompatible with big copyright holders' desire to completely control the life cycle of their content.

kyriakos2• 10 years ago

how's this helping Apple?

asdfologist• 10 years ago

"Apple Retail Stores and Online Store represent a significant chunk of online sales and Apple apparently feels that it can use it as a strong arm bargaining chip in these types of negotiations."

kyriakos2• 10 years ago

I know I read the article but it does feel like a childish reaction. Considering Apple sub contracts companies like Samsung with which they had legal issues in the past (or they still do not sure) and yet they continued cooperating.

appleflaxen• 10 years ago

More importantly: how is this helping Apple's customers?

atomical• 10 years ago

Are people using the Nokia Here app? I have it on my phone, but I haven't used it for navigation. At one point I was looking into experimenting with pulling the 3d building models.

kiiski• 10 years ago

Here isn't Nokia anymore. They sold it to Audi, BMW and Daimler in 2015.

divbit• 10 years ago

I used it exclusively for navigation on a windows 8 phone (and it was reliable and a good experience), but it seems they didn't release a windows 10 mobile version when I upgraded.

neves2• 10 years ago

It is excellent. Its offline navigation is way better than Google. A always use it when I travel to another country.

y04nn2• 10 years ago

How this is not an abuse of a dominant position? Nokia is suing Apple, so this is not Nokia that break an Apple patent where that would have been legit to remove those product from stores.

mcphage2• 10 years ago

Because Apple does not have a dominant position of retail stores—which it would need to have in order to absuse it.

y04nn2• 10 years ago

Anyway, they are using their position (dominant or not) to dissuade patent holders to attack them. I don't think that very fair, and it may indicate that they know they are infringing the law here.

jsjohnst2• 10 years ago

It's easy to cry foul here (and I would be too if it got pulled from the AppStore), but Apple can freely choose the products it stocks in its retail stores. Try suing Target, Walmart, Best Buy, etc, especially over a patent dispute. I assure you they'd likely do the same thing.

Also, in a way, Apple is hurting themselves doing this. For each sale of Withings in the store, they make a significant margin on the sale. I don't know the exact number, but I'm sure based on the industry norms for a similar product it's likely in the 25-35% range, if not slightly higher.

sbuttgereit• 10 years ago

Those wouldn't be rare gross margin percentages based on price/simple cost in much of retail. However, that simple gross margin calculation can be pretty far away from realized gross margin or net profit.

Once you're talking around 35%-45% gross margin, you're often times simply talking about potential: GM = (Retail Price - Vendor Cost)/Retail Price. That gives you the potential margin, but excludes actual performance including things not directly related to item performance (general administrative costs, losses due to shrink, returns, landed costs, etc.) So the realized margin at the end of a reporting period narrows from that gross margin approximation quite a lot sometimes.

I once ran an IT group for a start-up retail chain where we manufactured a number of the more popular product lines in our assortment. We were running up to 98% simple GM on products on the retail side in those lines and still ended up going out of business after a few years. The simple GM number was great, but the realized gross margin was maybe 50% so all of those other costs more than made up for it. And in the end, those products weren't the ones product management needed to be the most popular (they were pretty low dollar value).

A more interesting number on these lines would be GMROI (Gross Margin Return On Investment) along with Apple's typical GMROI numbers. The reason this value is more interesting is that gross margin doesn't really tell you how important a product is to your business. For example if I sell a single item at 98% margin over the course of a year, that's great GM, but the item I sell 10000 times over the same period with a GM of 25% is probably more important to my business (just one example of how GM might be misleading in this regard, there are other factors, too). To get this value you basically do GMROI = ((Item Revenue - Item Costs)/Item Revenue)/Average Inventory Cost (for quarter, year, etc). That's how you'd know if Apple were really hurting themselves moreso than not by not carrying this product line.

[edited for clarity of point]

jsjohnst2• 10 years ago

I should've clarified, yes, I specifically meant gross margin. I agree the other numbers are much more interesting, but sadly nobody outside Apple will exactly know them most likely. I only know the range for gross margin as I'm familiar with the gross margins on several items sold in the store in a similarish category.

neves2• 10 years ago

This isn't a fair comparison. Apple has a monopoly in the store of iOS devices. In Android you can authorize different stores, in Apple walled garden, you can't.

It is hard of find an equivalent metaphor in the real world. Maybe if you decided to live in the USA, them the government forbids you to buy something you like because they are in a commercial dispute with another country. Would you move just because of this?

It won't take long to get to the moment when Apple have more influence in your life than the government of the country you live. And you won't be able to vote them out.

hutattedonmyarm• 10 years ago

Apple hasn’t pulled the Withings apps from the App Store yet

They took the hardware off their store, not the App from the App Store. So this has nothing to do with being able (or not) to get your apps from different stores

xoa• 10 years ago

This isn't a fair comparison. Apple has a monopoly in the store of iOS devices. In Android you can authorize different stores, in Apple walled garden, you can't.

I think you've gotten confused here (or didn't read the article): this is not software we're talking about, this is hardware. The physical hardware products have been pulled from the Apple Store, both online and retail, not the supporting software apps in the App Store. And Apple has no monopoly whatsoever on retail or online equivalents, Withings are still readily available at a variety of outlets and of course on all the online ones, Amazon etc. So as long as it stays like that there is no issue at all. Particularly for Apple retail stock space is extremely valuable and precious and it's perfectly reasonable (and in fact necessary) for them to pick and choose what to stock for a variety of reasons.

On the other hand if at some point they extended that to the App Store as well or took any other actions whatsoever to use their artificial iOS platform technical control as a club (such as trying to make Withings devices cease to function with iOS devices) then yes, that would be really bad. Not sure whether it'd be illegal or not but it should be (although I think it should be legally required to hardware owners to be offered a root key on their devices too, but that's another discussion). At least for now though hardware stocking decisions alone are not a cause for concern.

mtw• 10 years ago

That's a shame because the other major alternative is Fitbit products such as Fitbit Aria or Fitbit smartwatches. And we know how Apple feels about Fitbit

expat39• 10 years ago

Well, Withings has all kinds of products but I wouldn't say they are a major player in any of them, in each product category there are players that are bigger and/or better: Fitness trackers:

- Apple Watch

- Fitbit.com

- https://explore.garmin.com/en-US/vivo-fitness/

- https://misfit.com/

Scales:

- fitbit.com

- https://www.getqardio.com/qardiobase-smart-scale-iphone-andr...

- https://www.underarmour.com/en-us/healthbox

Home cameras they come behind:

- nest.com

- canary.is

- https://www.netatmo.com/product/security/welcome