Apple Wins Big Over Samsung.

Do Customers Win or
Lose?

What we saw last week was a perfect example of business commerce by litigation. It is very
common in the electronics and software fields if you follow the news. You make money by
suing someone. There are whole companies whose only function is to buy patents, license
them and sue others.
As you have probably already heard by now, Apple won their patent suit against Samsung
for infringement of multiple design patents associated with the iPhone and iPad. Now
Samsung owes Apple $1.05 billion. Apple, the worlds most valuable company (About $625
billion by a recent estimate.) now gets richer. And they continue to dominate the
smartphone and tablet markets. In any case, Samsung will undoubtedly appeal as they
should. I suspect that Apples next legal target is Google who may or may not have violated
some of Apples design or software patents through Samsung and other Android handset
vendors. Time for negotiation and licensing.
I just do not know whether to be happy or sad about this outcome. On one hand, I believe in
the rule of law and Samsung was violating some Apple design patents. They should
pay. Besides that I love Apple. I have had a Mac since they came out in 1984. I used that
upright 9 inch mono screen computer until 1995 and have had many iMac versions since
then. And I have an iPhone. They are all good.
On the other hand I cant help but feel something is wrong with the system. Samsung was
trying to take a good design and duplicate or improve upon it. That is what competition is
all about. Innovation today is the process of finding a way around a patent or beating it with
an even better (patentable) design. The idea is to emulate not copy directly and, of course,
make it better. Who knows whether Samsung knew they were copying or not. In any case,
they got caught. And the outcome has to be higher phone prices for everyone.
Asian companies have always been emulators. They are good at it. They take a good thing
and make it better. And they provide excellent quality at reasonable prices. Thats why, in
case you havent noticed, the Asian companies own consumer electronics worldwide.
The outcome of the suit is that Samsung, in addition to having to write that big check can no
longer sell eight of their popular smartphones in the U.S. I am sure the carriers that offer

these phones are not happy. Those eight phones account for billions of extra dollars a year
in sales. That loss it what really hurts. Luckily the hot new Galaxy S III smart phone was not
affected by this ruling. Samsung being the leading smartphone provider will find a way
around this going forward. For example, they just announced a new version of their popular
Note cell phone, the one with the 5.5 inch screen and stylus. They also announced the first
Windows Mobile 8 phone. They will survive and will no doubt continue to be the
smartphone sales leader.
What I am sad about this whole thing is the dampening effect that this ruling may have on
innovation in general. It has got to be a nightmare for a design team to keep track of the
dozens if not hundreds of hardware and software features in any smartphone or tablet that
will require a license of some sort. With billions at stake designers will be even more
watchful to avoid infringing relevant patents. Can they do that while trying to innovate and
make better products?
The big unknown is whether our dated patent system is working as it should or would
changes provide the desired protection to the innovators while not killing off creativity and
improvement completely? (See one opinion
at: http://electronicdesign.com/blog/altembedded-6/embedded/applesamsung-judgmentbroken-patent-system-74342 )
It certainly appears that Apple will continue to prosper and get even bigger. The rich do get
richer. Rumors are that they will introduce the new iPhone5 September the 12th. It should
be another big hit. The other rumor is about a new iPad Mini with 7 inch screen to be
introduced in October. It apparently targets the very successful and well-received Kindle
Fire and Google Nexus 7. Steve Jobs apparently said no to a 7 inch screen at one time but
the market and competition may have changed the minds at Apple. Amazon is expected to
introduce a new and improved Fire before the rumored Apple introduction.
Designing a smartphone is difficult today. They all look alike and essentially work alike. All
have big screens, touch control, icons for the functions, and apps. How do you change that
into something that is better and different that customers will like and buy while not
violating any patents or requiring a license? Think deeply about that. And for a clue, take a
look at the new Windows Mobile 8 phones from Samsung, Nokia and others that probably
do not violate Apple patents.