In a historic decision the San Jose, California courtroom ruled that Samsung did infringe in some of Apple’s patents. The court ordered Samsung to pay over $1 billion in damages for patent infringement.
The court ruled that Samsung did, at times willfully, infringe on some of Apple’s iOS patents: the bounce back on lists, pinch to zoom etc. As a post-trial response Samsung announced it will fight this decision and that the court ruling affects the consumers.
While it’s pretty obvious that Samsung borrowed, to say the least, some of Apple’s hardware and software design and interface elements the decision is clearly going to have negative consequences on the mobile phones and mobile applications market.
The court ruling changes everything. Again.
1. Apple will continue its growth, having secured its proprietary hardware and software design – Apple is already the biggest company ever, in terms of market valuation. After Steve Jobs’ demise many wondered if the company will continue to grow. It did. This year saw the rise of incumbent Android based mobile devices which were growing at a faster rate than iOS based ones (Android is the dominant mobile OS in the US) and threatening Apple’s hegemony. Samsung was the biggest challenger in terms of hardware development. Having taken a massive shot at the opposition Apple can continue focusing on innovation and expanding its market share.
2. The mobile market will suffer from this decision. Samsung is one of the biggest competitors to Apple. As the smartphone market is ever increasing Apple just made a very large step to a de facto monopoly on this market. While they couldn’t do that by economic means, they showed they can do it through legal arguments. The decision to punish Samsung on adopting the interaction methods Apple “invented” is like ruling that only one PC manufacturer can ship PC’s that use keyboards and mice for user-to-computer interaction.
3. The target is not Samsung. It’s Android. Apple doesn’t care that much about the fact that Samsung has copied its products. It was just the easiest target. Otherwise they could have just sued every other smartphone manufacturer – it’s easy to see that the iPhone shifted the entire mobile industry to a different direction. One that Apple holds patents on. What Apple is really worried though is the Android OS. It’s popular, reliable and it is growing way faster than the iOS. Of course Apple still rules the market in terms of revenue but not for long. Amazon is already generating 89% of Apple’s App Store Revenue through its own Android store. This leads us to…
4. Everyone sees the jury decision as Microsoft’s chance to shine. But it’s Amazon that will benefit most. Microsoft can try and try to reinvent themselves. They won’t. It’s a corporate dinosaur that lacks innovation and courage. You know who does have those things, plus a ton of cash? Amazon. Amazon has had an amazing trajectory the past 5 years having reinvented reading with Kindle and now challenging Apple’s reign in the mobile app area. They are closing in to Apple in terms of mobile – generated transactions. With Samsung out of the picture they will be able to lead the Android revolution.
5. Apple’s actions might backfire. Remember the days when Microsoft ruled the IT world with a iron fist? The were used to buy smaller competitors, drive them out of business or sue them out of the game. It didn’t work so well after all. Right now people are buying Apple products because they love the brand. If the brand shows its money hungry face, the feelings towards the brand might be affected and turn into decreased revenues and company valuation. After all – the market is all about perception.
In my opinion the Apple – Samsung dispute should be resolved by the markets and the consumers, not in a courtroom. It is a dangerous precedent that harms an young and fast-growing industry. Patents or no patents there are millions of Samsung users that will suffer from this decision.