There have been many challenges to date, but most of them involve “forks” of the Android system: where another company builds their own system on top of a previous Android release. Amazon’s Kindle Fire, Barnes and Noble’s nook, and Samsung’s rumored / assumed proprietary fork are all notable examples of Android derivatives. None of these to date have looked poised to take Android away from Mountain View anytime soon. Samsung, with its market share momentum and marketing prowess, could stand to be a significant threat, but for now its flagship products still run Google’s “stock” Android, more or less.

Horace Dediu put it plainly:

Facebook Home can only reside on Android because only Google was daft enough to allow it.

At the least, I expect an increased emphasis from Google on the virtues of “stock” Android, and an increased push to make that consistent for consumers. This is already underway on both OEM and developer fronts, but Facebook’s lurking presence will force the issue that much harder.

Home’s to-be-determined success could also force Apple’s hand. Such a product is neither technically nor legally feasible on iOS at the moment, and Facebook’s integration into iOS 6, while powerful, is much less than Facebook Home provides on Android, and thus presumably much less than Facebook wants on iOS. As I said last week, if too many consumers start considering Facebook Home a deal breaker, Apple may need to make some moves of its own. How many consumers that is, and whether they’ll in fact get on board, remains to be seen. All of this just underscores what’s at stake for everyone — Facebook most of all. With just one announcement, Facebook has made itself a strategic stakeholder in the mobile landscape. It’s no longer just a website and an app.

Google knew what it was doing when it made and marketed Android as an “open” system. It surely anticipated forks by handset makers as a manageable risk as long as Google kept advancing the system. But I wonder if it expected something like Facebook Home: an inside-out heist, made by a company after the same exact user data and advertisers Google is after. How it chooses to respond in the near future should give us an answer.

You cannot put your future in a competitor’s hands. So what do you do? Do you enter uncharted territory, make your own mobile operating system, and hope people switch?

Of course not. You make your competitor’s system yours — overnight. Facebook Home is a trojan horse designed to steal the Android experience, and the Android user base, right out of Google’s hands. The majority of speculation over the last year or two had been that Facebook was working on its own mobile OS. It may well be, but this move is so much smarter on a number of fronts:

1. Time. Home significantly increases Facebook’s mobile presence without being everything. A lot of time and care seems to have gone into it, but it’s surely far less than a full-blown operating system would require.
2. Installed base. Built in. The sales pitch is very simple: If you have a device that Home supports, download it. No money, no switcher headaches. Blackberry and Windows Phone sales prove that people aren’t looking for new platforms right now.
3. Software Experience. Facebook’s engineers have surely learned a lot from this project. That experience will be reapplied not only to expanding Home itself, but to building a full-blown OS if they want.
4. Hardware Experience. While the software is the real news here, Facebook took the initiative to also start working with a handset maker. The HTC First is hardly a “Facebook phone”, but it’s a chance for Facebook to experience the complexity of coordinating hardware, software, and carrier partnerships from a distance. Remember the Motorola ROKR? Remember what happened fifteen months later?
   • HTC was the obvious choice. Samsung and Android have ruined them, and they’re desperate to stay relevant. Facebook likely got everything they asked for.

Facebook has loudly and confidently entered an arena it has no prior experience in, and has set a clear path to expand its influence at its own pace. Facebook Home will provide a halo effect to current Android users that warms them up to a full-blown “Facebook phone” in the years to come. It gives Facebook the experience, confidence, credibility, momentum, and time to build a better and broader mobile experience than they would have been able to build otherwise. It’s as prudent as it is ambitious.

I think we’ll know well before the end of this year how Facebook Home affects handset sales. If buyers start asking “does it have Facebook Home?” — and I think many will — that will be bad news for both Google and Apple. However, the Google – Facebook war is sure to be more vicious than the Google – Apple war because Google and Facebook have the same customers: advertisers. Users are their currency, and Facebook is about to rob the bank.

You should check out the previous episodes as well. Rene and Guy have managed to get great guests every time. Until this week, at least.

Everything about this event, from the lack of specifics, to the Office Space slides with MS Paint brains, to the creepy old man head, points to a rushed announcement. Why? Why did Sony need to talk on February 20th? Why not wait for a presentable product? Some playable games? Anything real? And why release the technical specs after the event, having just filled a room with reporters for two hours? Even the official press release feels sloppy, listing PlayStation 4 itself after the new controller and camera. Everything about the announcement is weird.

It’s easy to get sidetracked and ridicule Sony (again), but this is a teachable moment. People would have happily waited longer for a comprehensive, exciting product launch. It’s been nearly seven years since the last PlayStation was revealed; would another month or two have tipped some scale? Whoever this was aimed at — developers, hardcore gamers, casual gamers — the utter lack of usable information makes the timing questionable at best.

There are also competitive repercussions: Sony has now shown its hand way ahead of time. Microsoft is not expected to announce its next-generation Xbox until E3 in June, leaving more than three months to respond accordingly. If Sony’s offering ends up superior to the Xbox when that announcement happens, then Sony hasn’t gained much, because we still don’t know what it has or what it can do, and it’ll be months-old news. If Sony’s offering ends up inferior, it will be upstaged and stale.

If you’re going to strike early, you must strike hard. A strong offering is strong at any time. The same goes for a weak one. The difference is knowing what you have, and adjusting the message accordingly. Sony did not do that yesterday, and has now lost the opportunity to do so tomorrow.

First: retail chief John Browett was surely done before we on the outside even heard about his scorched-earth penny pinching. My first thought when those stories started to hit was, If this is true and Tim does not fire him, there’s a problem in Cupertino. What’s telling is how long it took. I suspect Forstall had worn out his welcome long enough ago that Cook held onto Browett for a single press release. Canning Browett so soon after hiring him, then losing Forstall just a few months later, would have shaken a lot of confidence. Losing Forstall sooner would have disrupted teams and product launches. There’s only one headline now, and it’s framed in a proactive manner. From a cold business and PR perspective, I’m very impressed. Tim clearly knows every side of how Apple does things.

Forstall’s star shot upwards from a low level to standing alongside Bertrand Serlet — the man he worked under for years. When Bertrand left Apple, I was sure that Forstall would press to expand his influence, even if he wasn’t given Bertrand’s turf. When Steve departed, I felt the same way. I’m not surprised his style continued to ruffle feathers, but I’m shocked that it cost him his job. I underestimated Cook. Scott’s absence from the iPad mini event last week should have been more alarming to everybody.

If this was only about Forstall being a problem, though, Apple would replace him. They clearly aren’t: the same press release explicitly states a search is underway to replace Browett. Not only is this a profound increase in responsibility for all three of these top executives, it’s a profound change in Apple’s organization going as far back as I can remember. There’s a long-standing pattern of separating watershed products important to the company’s future. The Mac and Apple teams. Mac OS X and Classic. The iPod division. iOS and Mac OS X. Suddenly, Tim Cook has pulled the reins in. Federighi owns software. Ive owns design. Cue owns services. Period.

Apple’s insane growth has pushed the situation over the edge. Too much size and separation inevitably bring politics, chaos, dropped balls, and finger pointing. None of those things are good for Apple’s products or customers. What we don’t know is whether burdening Cue, Federighi, and Ive even further will actually improve things. These guys already had enough to worry about. The worst case scenario is one where good leadership is spread too thin, and everything suffers. These are real growing pains.

Four hundred million devices and five hundred billion dollars later, Apple is different. It’s just finally starting to look that way.

As ReadWriteWeb’s Brian Proffitt explained last week, omitting NFC is a conscious decision that can be easily reversed in the future. But unlike earlier missing iOS features like copy-and-paste, multitasking, and yes, an SDK, NFC is far from a no-brainer addition to Apple’s flagship product. Critics are stuck in the usual mud of tracking technology rather than utility.

It’s no coincidence that the “Tech Specs” link atop apple.com/iphone is dead last. Apple’s best marketing has always been about what a product does, not what it has. Forget MHz and GB and mAh — how much faster does it launch apps? Play games? Snap pictures? Load web pages? How many hours of video and talk time? These are things that anyone can not only understand, but appreciate.

Behold the NFC issue. What can people do with it today? All we hear is what they should be able to do with it someday. Search the web for “near field communication” — the 2010 articles read exactly like the 2012 articles. And boy are they wordy.

It’s not the technology that matters — it’s the utility that the technology provides. There are plenty of solutions to the mobile payments problem. NFC has not delivered, and Apple has no incentive to change that. By shipping NFC in the current climate, Apple would implicitly take responsibility for making that technology a success. That means not just building a first-class iOS experience, but working with businesses to accelerate adoption around the world.

And for what? If Apple leads this charge, rounding up vendors and merchants like it did the music companies, how much more attractive will iPhones suddenly be? On the contrary, carrying the NFC torch would likely help Android as much as iOS. If NFC does in fact take off, then Apple will add it, and the debate will be over. More low-hanging fruit off the tree. If it does not take off, then Apple remains flexible (ahead?) in solving the utility problems that this one technology failed to.

This is where Apple’s market dominance becomes so important. The truth is that NFC won’t take off without Apple — at least not nearly as quickly as it would with Apple. So the critics’ “disappointment” is in fact just a sad realization that the elusive NFC promise is at least one more year away from being kept. In the meantime, Apple keeps solving real problems it knows it can solve right now.

He worked at Samsung.

It’s clear to me that over the last five years or so, Samsung has built not only a multibillion-dollar business, but a corporate culture around having Apple’s number. The partnership has had irreversible conscious and subconscious effects on the way Samsung’s product divisions think and do business. The proof is on the store shelves. It’s sickening.

But is it illegal?

That’s the question we must ask ourselves as Apple v. Samsung heads to the jury. The trial’s drama has distracted from what I see as its real long-term implications.

I must say I believe Samsung’s defense has been terribly flawed. Apple has argued that Samsung illegitimately profited off of Apple inventions. Rather than “We took inspiration, but here’s why that isn’t infringement,” Samsung’s rebuttal seems to have been “These are our own inventions.” I don’t see any reasonable jury believing that for a second, but depending on Judge Lucy Koh’s instructions, they may not hold it against Samsung either.

On the topic of damages, Charles Arthur writes for the Guardian that when rebutting Apple’s $2+ billion figure:

Samsung argued that Apple, which was struggling to keep up with demand for the iPhone 4 from July to October of 2010, did not have the capacity to have delivered on those additional sales. “Apple couldn’t service its own customers with the iPhone 4, but it could service customers it didn’t have?” Samsung attorney Bill Price asked…

This took my breath away. Here’s an opportunity to say “These people chose to buy Samsung instead of Apple. We are clearly bringing something to the table,” but instead, Price concedes “These people settled for Samsung because they couldn’t have found an iPhone anyway.” (Samsung may well know this for a fact because it’s supplying many of the components Apple needs to satisfy customer demand; see “having Apple’s number” above.) It was extremely shortsighted.

The stakes in this trial are enormous. If Samsung is vindicated, it will embolden competitors everywhere to aggressively mimic the iOS experience. That would be immeasurably bad (and familiar) news for Apple.  If Apple wins, the damages check will be the least of Samsung’s problems, and Apple will itself be emboldened to further press its rights.

Most importantly, this case brings the ever-brewing controversy of software patents further into the spotlight. Apple’s case is far from patent trolling, but I do worry about the precedent it could set. If a verdict is reached, lawyers and judges across the country will surely look back to this case repeatedly during their own. In closing arguments, Apple attorney Harold McElhinny told the jury:

If you find for Apple in this case, you will have re-affirmed the American patent system.

Many people in the tech industry don’t see this as a good thing at all — so much so that one might think Samsung’s lawyers said it as an argument against finding for Apple. An Apple victory will surely inspire other far more cynical parties to beat down would-be competitors.

I must admit I’m uncomfortable with the idea that the world’s largest corporation, whatever its name, could be given such a big stick as early as this week. However the verdict falls, I feel like there are no winners here in the long term — certainly not us. Maybe that’s why Judge Koh has been begging for a settlement.

At the end of that week, you’re beyond exhausted. It’s the kind of tired where you just don’t know what’s happening anymore. The typical notions of crankiness are long gone.

On that Friday afternoon, the last day of my last WWDC as an Evangelist, someone stopped me to say hello. I was walking with a friend in the Metreon, across the street from Moscone West, where WWDC is usually held. It was a husband and wife who were starting an iPhone game company. They were very friendly and a little shy, and they just wanted to introduce themselves.

You never know if you’re going to see these people again, or what they’ll end up doing, or how much success they’ll have. Exhausted, and knowing that I had one foot out the door, I held it together to chat with them very briefly and offer words of encouragement.

That husband and wife team was Keith Shepherd and Natalia Luckyanova. You probably know them better as Imangi Studios, the makers of Harbor Master, Max Adventure, and of course Temple Run, which has hit an amazing 100 million download mark .

That was more than three years ago. I’ve since moved on, and I love every minute of what I’m doing. But I definitely miss moments like that one.

Consensus among most of the coverage I’ve read is that this is somehow a departure from Steve Jobs’ position of “thermonuclear war“. While Tim Cook is not Steve Jobs, his statements certainly don’t indicate a change in policy. All Cook said is that he’d rather not go to court. He didn’t say he’s willing to compromise, or accept a settlement in which Apple continues to be “the developer to the world,” or competitors don’t “invent their own stuff.” Through that lens, I’m sure Steve Jobs would have also “preferred to settle”.

Litigation costs time, money, and effort that could and should be spent doing what Apple actually wants to do: work on the next great thing. I don’t see why so many people are confusing Apple’s disdain for distraction — which is nothing new — with a sudden interest in olive branches.

The announcement itself was intriguing. Why a conference call? What’s wrong with the press release? (I asked this on Twitter  regarding both dividends and buybacks.) When Apple stands up to talk, people expect something big. Anything less is bound to disappoint someone. I can’t imagine investors receiving this news differently in print versus audio form. It felt like a departure from Apple’s typical controlled communication style. Maybe Tim Cook just likes talking to investors.

The Buyback

Cook and Peter Oppenheimer repeatedly cited “dilution from our employee equity program” as the reason for a buyback, and it’s a good reason. Stock compensation remains instrumental to attracting and retaining talent, and Apple needs to keep that incentive strong. Horace Dediu has a nice breakdown on the buyback numbers.

People love to talk about Apple “taking itself private” as the cash pile grows. Steve Jobs famously loathed shareholder meetings, so it’s fun to think about. But it makes no sense. If Apple bought itself out, it would have no free shares to reward employees with, and no cash left to replace those shares with bonuses.

The Dividend

At face value, I don’t get it. Just look at this chart. If you’ve consistently sworn off Apple shares just for lack of a dividend, I question your sanity. If you have Apple shares, and are still holding your hand out in the face of these stratospheric gains, your hubris is breathtaking. Apple has always acted in its own interests, and spent money in places that it believed would yield benefits for the business. A dividend does not do that. How can they just start throwing away billions of dollars a year?

One thing a dividend does is encourage long-term investment, which could help stabilize the stock price. It’s bound to slow down sooner or later. The question is, when will that happen, and how dramatically? Perhaps Apple is attempting to impact that part of its destiny as it does any other. Reducing heavy speculation on the stock could cut down on future dramatic corrections, which would be good for Apple’s “real” investors — especially its employees, whose compensation is tied to the stock.

Apple grants restricted stock units (RSUs) to employees. These are shares at market value, as opposed to options, which have a strike price. With options, the stock needs to grow above the strike price before the employee makes any money. By contrast, the employee can sell RSUs at any price and get all the money.  The use of RSUs makes growth nearly irrelevant to employee compensation.

At this stage, then, management is incentivized to prevent the stock from crashing rather than keep it climbing; to keep those shares, which Apple is about to spend a lot of money buying back, stable. Viewed in this light, and alongside the buyback, a dividend does invest in the business and its employees, while also pleasing the open mic comedians who descend on Town Hall every February. It also feels more like Apple-style thinking, which is to say not your average executive team that mortgages everything just to make the stock go up.

Apple said Monday’s news was all about cash, but it was really about stock. It highlights the company’s shift from an underdog-turned-juggernaut, to the world’s biggest company securing its position as the world’s biggest company.