A Hint of Big Trouble for Apple


    Big companies that make a lot of money are perpetual targets for individuals looking to grab some of it. Few companies have the reserves of cash and equivalents that Apple (NASDAQ: AAPL) does, and it has an enormous consumer user base, so it stands to reason that the company would be one of the biggest targets of them all.

    Of course, those rich companies also have access to some of the best legal talent around, so it isn’t that easy for a regular person to win a lawsuit against them. However, while it may not be easy, it is certainly possible. And the odds increase if the case turns into a class action lawsuit.

    Companies like Johnson & Johnson have had to pay hundreds of millions dollars each to settle multiple lawsuits. And now it looks like it may be Apple’s turn.

    Right now, there is only a glimmer of a possibility, and it lies in an e-mail buried in an older court case. An Apple engineer wrote that FaceTime on iOS 6 “was a big user of relay bandwidth. We broke iOS 6, and the only way to get FaceTime working again is to upgrade to iOS 7.”

    The problem is, iOS 7 was too much for the hardware in iPhone models 4 and 4S, which were still being used by more than 10% of Apple’s user base.

    Now, a suit against Apple has been filed by a woman in California accusing Apple of deliberately breaking iOS 6 to force users to buy new phones that could handle iOS 7. The court could decide to take the matter further, and/or it could turn into a landmark planned obsolescence class action lawsuit that would include all iPhone 4 and 4S owners from that period.

    Fortunately, Apple can easily afford any judgement made against it, with almost $250 billion in cash and equivalents. In fact, under the circumstances, it looks like it would be in Apple’s best interests to simply settle the case, rather than waste resources on defending an expensive court case.

    Either way, though, this is a topic that could be well worth watching.