August 2012

[Commentary] The more-than-$1-billion award in Apple's patent case against Samsung is a big win for the iMaker of the iPhone and iPad. But it may not be in the best interest of consumers.

At least not in the short haul. If Apple prevails in the appeals process, it will mean the company has a right to exclusive use of its innovative technology. And that's only fair. But for consumers, it would mean fewer copycat devices hitting the market and less price competition. And that would almost inevitably mean Apple -- or any other innovator -- would be able to charge whatever it thinks it can get away with. Look at it like this: Say Louis Vuitton comes out with a new bag. It costs a lot. Other designers come out with knockoffs. They cost less. Louis Vuitton, in turn, cuts prices for its original bag. Tough knocks for Louis Vuitton, perhaps, but a win for consumers who were attracted to the bag. Now they have choices, and at a variety of price points. Over the long haul, strict patent enforcement can promote innovation, which in turn can result in cool new products coming to market. But as someone who hasn't been willing to plunk down big bucks on either an iPhone or an iPad, I've been grateful for the me-too devices that have come out from other makers.

The verdict in Apple’s battle with Samsung over smartphone design patents will -- if Samsung is to be believed -- usher in an era of iPhone dominance in the “post-PC” world.

Samsung, the biggest technology company in the world by revenues, responded forcefully to the Californian jury’s verdict that it had infringed all but one of the patents Apple has asserted against it, calling it “a loss for the American consumer [that] will lead to fewer choices, less innovation, and potentially higher prices.” “Samsung is already more consciously avoiding copying,” says Horace Dediu, mobile analyst at Asymco. “The result is mostly symbolic but management at Samsung and other companies will perhaps hesitate more and be more fearful.” Yet if the short term is fraught with uncertainty and risk for Apple’s rivals, longer term some see Apple’s legal victory hurting it, as its rivals are spurred to create more novel devices. “In the short to intermediate term, an Apple win forcing competitors to come up with different designs should be positive because Apple is a better designer and could have a monopoly on key features,” said analysts at UBS in a note last week. “In the long run, however, it could hurt Apple because the real threat is not a competitor beating Apple at its own game but instead changing the game. The likelihood of Apple being leapfrogged or a rival creating a new category is greater if they have to think out of the box.”

[Commentary] One, how badly has Apple been hurt by copycats if it has become the richest company on earth? Do we want a patent system in which the strongest sue everyone else? Is this good for innovation? Two, Apple lost the jury trial on most of its hardware claims, such as a ridiculous patent on curved glass for phone surface design. Apple won mostly on software, such as "pinch and stretch," a nifty design trick Apple introduced in 2007 with its first iPhone.

So why did Apple sue Samsung, the Galaxy hardware manufacturer, and not Google, maker of the phone's Android software? Politics and public relations, mainly. Apple knows that suing a foreign giant will go down a lot better than suing a Silicon Valley neighbor.

Apple enjoys huge favor right now among customers, politicians and the public. Suing Google would divide Apple's support and tarnish the company's image. So Apple sued a foreign company to send a message to Google. This techno-Shakespearian story is entertaining but is bad for the phone-buying public. (Tablet patents were also part of the Apple-Samsung court case, but smartphones were at the heart of the lawsuit.) As Samsung contemplates filing an appeal, it appears that smartphone-makers may begin redesigning their products to avoid crossing swords with Apple.
[Karlgaard is the publisher of Forbes]

It took a couple of days, but Google has finally responded to the $1-billion-plus jury verdict against its partner Samsung Electronics for infringing on Apple’s patents.

Its take on the impact of the verdict on its popular Android mobile software: Most of the claims don’t relate to “the core Android.” “The court of appeals will review both infringement and the validity of the patent claims,” Google said. "This verdict is a major victory for Apple vis-à-vis the Android ecosystem,” Toni Sacconaghi, an analyst at Sanford C. Bernstein & Co., wrote in a research report. “We believe this is unambiguously negative for Google and the Android ecosystem." But Sacconaghi added: “We don’t think it is a game-changing loss for Android. Given the rapid pace of innovation, relatively short product cycles, and global nature of the smartphone market, we think it is very unlikely that Apple, Microsoft or any third parties could strike a mortal blow to Android through litigation.”