| NEW YORK
NEW YORK Jan 22 Some Palm Inc PALM.O
investors are worried that its highly anticipated new phone,
the Pre, may face a legal challenge from Apple Inc (AAPL.O)
over touch-screen technology.
Apple Chief Operating Officer Tim Cook said on a quarterly
earnings call on Wednesday that the iPhone maker would use all
its weapons to fight any rivals that "ripped off" its
intellectual property (IP).
"That could be a warning shot across the bow," Peter
Strand, an IP specialist at law firm Shook, Hardy & Bacon said
Analysts said Cook's comments could mean that Apple is
planning a legal case against Palm for when the Pre comes on
the market in the first half of this year.
Specifically, the concern is that Apple could assert IP
rights against Palm over Pre's multi-touch interface, which
lets users navigate a website by pinching their fingers
together or spreading them apart on the phone's screen.
The Pre, which also has a slide-out keyboard, was unveiled
with much fanfare at the Consumer Electronics Show in Las
Vegas, more than doubling Palm's shares over about 6 days.
Palm shares were down 27 cents, or 3.4 percent, at $7.57 in
afternoon trade on Nasdaq, after falling as low as $7.15
earlier in the session. Analysts said Cook's comments had
weighed on the shares.
The retail price of the Pre has not been divulged.
Apple, which was careful not to mention a specific company
in its comments, has been much lauded for the iPhone's
multi-touch feature, launched in the summer of 2007.
"Palm is the first one that would spring to mind. You've
got a new product with similar features to iPhone, and you have
executives leading the charge from Apple," said Avian
Securities analyst Matthew Thornton.
He was referring to Palm Executive Chairman Jon Rubinstein,
who used to be a top hardware engineer at Apple. Fred Anderson,
now a director at Palm, was previously Apple's chief financial
Palm has a storied history in touchscreen devices. It is a
pioneer of touch-controlled gadgets ranging from the Palm Pilot
personal digital assistant to the Treo and Centro phones that
allow consumers to manage data without using a keyboard.
"Apple was not the first to do multi-touch," Palm
spokeswoman Lynn Fox said in an e-mail when asked to comment,
adding that multi-touch has been around since the mid-1980s.
"Palm has been building its own intellectual property
portfolio for 15 years, and we will defend it vigorously, if
necessary," said Fox.
Pre, based on a new operating system from Palm, is a
highly-anticipated device that analysts see as Palm's only
chance of fighting back against competition from Apple and
BlackBerry from Research in Motion Ltd RIM.TO.
"Palm, like Apple, has a rich heritage in touch
technology," said JPMorgan analyst Paul Coster, adding that
this may be a hotly contested area as "a lot of companies have
intellectual property relating to multi-touch."
UBS analyst Maynard Um said that while Apple's comments
seemed to be weighing on Palm investors' minds, they did not
change his investment opinion on Palm so far.
"We don't have enough details about the technology from
either Palm or Apple to tell if there is an infringement," he
said. "It's a little premature to talk about because (Pre's)
not even a commercial product yet."
(Reporting by Sinead Carew and Franklin Paul; Editing by
Gerald E. McCormick, Toni Reinhold)