It may not have been the most expensive piece of Litigation in history. It may not have been the longest. There have been bigger corporate disputes and there will be even bigger ones in the future. If records could be given for column inches covered and number of related tweets sent though, the Apple v Samsung Litigation would surely have claimed a couple of world records. The biggest US corporation in history, with cash reserves that are in excess of those of the US Government, taking on the world’s biggest producer of mobile phone handsets. While the dispute has been between Apple and Samsung, it may as well have well have been Apple v Android, the operating system used by Samsung’s handsets.
The Court in California awarded Apple $1.05 Billion in damages, after the jury found Samsung had copied certain features of the iPhone and iPad, including such prominent innovations as touch to zoom. The verdict could lead to an outright ban on sales of key Samsung products in the valuable US market. This was of course the overall objective. $1 Billion is loose change for these corporations compared to the value handset sales over a period of several years in the giant US market. Samsung sold over 50 million handsets during the period from April to June alone. Samsung will have to pay less than half the compensatory damages Apple sought. Indeed, the damages themselves are just 1.5 percent of the annual revenue from Samsung’s telecoms business.
Samsung has stated it will appeal against the decision, but Judge Lucy Koh could realistically triple the fine because the jury found Samsung’s infringement of Apple’s patents and designs was “wilful”. However we are still in the realms of loose change as far as Samsung is concerned.
A more pressing concern for the South Korean giant is its loss of $12 Billion from its market value after a 7.5% fall on the South Korean stock market on Monday 27 August. Furthermore, while its flagship SIII brand is not included in the case, it is possible that Apple will push for a total market ban for Samsung within the US. Apple will also be able to apply for an injunction in the US against the 24 smart phones and tablets named in the suit at a hearing set to follow last week’s judgment that is now set for December.
Apple may also use this decision as a basis to now open its assault on Android as a whole, making similar claims against both HTC and Google – owned Motorola. The late Steve Jobs had made his intention to declare “thermonuclear war” on Android very clear, and by attacking the manufacturers and the patents they hold Apple is looking to arrest Android’s growth and attack its current 68% market share.
Ultimately, the decision will have an impact on the consumer. Choice could be severely limited. Innovation could also suffer. It is an oft – made criticism that each successive version of the I-Phone that is launched is less revolutionary than its predecessor. Against this backdrop it has been other manufacturers, most notably Samsung, that have forged ahead with innovation across their handset and tablet ranges.
The big winners in this dispute could be Microsoft. With Windows Phone 8 about to launch with support for up to 64 cores, HD screen resolutions and of course, the same DNA as Windows 8, the big weaknesses inherent in Windows Phone 7 will be eradicated. Microsoft’s manufacturers will also be insulated from any ongoing Apple patent litigation against Android. Suddenly Nokia with the Lumia looks a much more attractive proposition. Indeed Apple used the Lumia as an example during the Samsung trial of how a smart phone can look different.
What this dispute has illustrated is that while these huge corporations may have seemingly infinite resources at their disposal, their foundations may be a little more fragile than they would lime to think. Before Apple changed the goalposts, Nokia ruled the mobile phone handset roost and Microsoft had the lions share of the personal computing market. Apple’s fortunes have risen but can just as easily fall. Given the reputation for innovation from other manufacturers like Samsung and Nokia, the most dangerous thing for Apple to do now would be to sit back and rely on its patents and a court enforced embargo to retain its US market share before releasing further evolutions of the iPad and iPhone. Their rivals will now direct their resources in other directions away from the ground covered in Apple’s patents and could unveil ground breaking new 4G products that could change the market in the same way that the iPhone did in 2007. Victory can lead to complacency, which can be a very dangerous state of mind.