Apple has done a good job of persuading people that this case was about protecting innovation and about Samsung's specific alleged infringements of their patents. But this is nothing more than a smoke screen for their ongoing proxy war on Android.
They've refused to compete with Android on price, features, and form factors and the market has punished them for it. Expect more attacks on Android seeking ridiculous damages for non-essential details of mobile UI design.
However, I strongly suspect Apple is going to regret these tactics in the long run. Once the tiger is out of the cage there's no telling who he will bite.
Apart from the specifics of this or any other court case involving Apple attacking Samsung, I find the desire to defend Samsung odd. Obviously they copied Apple as much as they felt they could get away with. They did this because it was a very conservative way to make a lot of money.
This isn't an admirable strategy. It's annoying. It's precisely the strategy that major movie studios use to give us one boring, risk-free "blockbuster" after another. The other day I read a history of the making of White Men Can't Jump:
The head of Fox at the time, Joe Roth, mentions, "That movie wouldn't get made today. Us moviemaking guys, the studios, have less courage to make a movie like that today with the kind of racial, sexual overtones." It's sad. I would appreciate a big budget movie studio that did not consistently churn out the safest derivative crap they can.
I do appreciate that there's one consumer electronics company that attempts and succeeds at novel, high risk products. Of course, there's a good chance that risk taking spark died recently, but I have appreciated its presence until now.
Maybe patents are bad, but I don't think is a case where that stance holds much emotional appeal other than to those who like to see Apple lose. Most people think Samsung clearly did something shady here and deserves to be punished.
I don't have any particular loyalty to Samsung but these cases set a chilling precedent for the platform that looks likely to dominate the computing industry for at least the next decade. There's much more at stake here than a few billion dollars and a few icons and scrolling techniques.
If this continues we're going to spend the next decade tiptoeing around every trivial implementation detail of mobile UI instead of boldly exploring new ideas. Apple's successful use of the broken patent system sends exactly the wrong signal.
Not only that, its going to set innovating in the mobile space back even farther. While Apple outlines every decision meticulously for planned obsolescence, Google and others take a more throw something out there, see if it works and run with it approach. With both strongly competing it pushes the entire industry forward faster.
It's easy to argue that they aren't competing. Apple innovates in their sphere of innovation, their competitors copy them and produce cheap knock-offs attempting to cash in Apple's R&D.
It's not competition when one company does ALL the innovation and other companies just copy them and try to win on price.
It would be competition if Google tried to out-do Apple, but they don't.
Samsung doesn't compete with Apple either. They are more similar to counterfeiters who sell black-market Oakley, Nike, and Prada stuff in alleyways.
Competition would be if Samsung improves on Apple's designs to create something superior.
> Samsung doesn't compete with Apple either. They are more similar to counterfeiters who sell black-market Oakley, Nike, and Prada stuff in alleyways.
My goodness. Samsung designs may imitate Apple's to some debatable extent, but they're not labeling their products with an Apple logo. The way I see it, TV makers imitate each others' designs and features all the time, and so do car makers and fridge makers.
> It's not competition when one company does ALL the innovation and other companies just copy them and try to win on price.
Your generalisation is extreme. Surely Samsung, HTC, Sony, LG, etc. do innovate (with reference to their legacy in the wider field of electronics)?
And they are certainly competing. The very definition of competition is to sell a product that is a close substitute for another. Your assertion seems to make innovation the only thing that matters for competition, which it isn't.
Society would be better off generally if competition (of all forms) increased in more markets.
Not to mention, sometimes "innovation" just means innovative pricing schemes. Not innovation in actual technology. Google has been able to price their devices more competitively, which in and of itself is an innovation.
> > It's not competition when one company does ALL the innovation and other companies just copy them and try to win on price.
Zipcar. I just paid $137.39 for an Audi Q5. Audi can't do that. Price is usually the result of innovation, the tip of the iceberg. Otherwise we'd wouldn't be driving cars or, hopefully soon, flying into space. If anyone offers an iPhone 5 cheaper than Apple I'm sold! Better yet, make a phone better than the iPhone AND sell it cheaper!
Samsung COPIED Apple, so when you enjoy your Samsung phone, you are enjoying the fruits of Apple's research, development, design, market testing, etc.
The majority of the creative, intellectual substance that is contained in the Samsung phones originated in Cupertino. Point being that if we want companies to create new things rather than just copy old things, we need to give greater rewards to the actual creative people who take risks and come up with the new ideas. The people who jump on board and say "I can copy that!" really deserve no consideration at all.
are you serious, so initially Samsung copied Apple theres nothing you can see that Apple copied from Android ? Look at IOS5 and you will see a lot they copied.
"If this continues we're going to spend the next decade tiptoeing around every trivial implementation detail of mobile UI instead of boldly exploring new ideas."
But wouldn't this then spark greater innovation? Innovation doesn't come from slavishly imitating what came before. Revolutionary new designs and UI will come from those bold enough to seek vision that has no chance of infringing upon previous patents.
No, it won't. It will hurt innovation because every damn thing is going to have to go through a committee of lawyers before being approved, and it will hurt innovation because the idea that innovation always involves making something brand-new and from whole cloth is fucking retarded.
Also the idea of a patent for pinch-and-zoom makes about as much sense as a patent for 'a vehicle powered by steam'. Patents are about implementation, not ideas.
But what if this spurns designers and engineers to create designs that are completely different from before, because anything too similar is out of bounds? Wouldn't that drive them to think more different and wildly and uniquely? We may get a lot of stupid failed attempts out of this, but at least it will put the kibosh on "me-too" designs.
What did Samsung do that is shady, that Apple itself didn't? Apple was the first to market with the most-polished device, but all one has to do is look at the old Palm Pilot to know that they completely ripped off the design and layout. Who cares? Apple was already winning on their merits. I have a feeling people will look back on this as a major turning point in Apple's history. They are starting to look like a paranoid ruler worried about an imminent attack instead of playing offense they way they used to.
Right, any computer with square icons arranged in a table format must have originated from the Newton. How could anybody have figured out to put icons into rows and columns?
But seriously, Palm had an SDK and a phone with a touch interface and downloadable apps a good three to four years before the iPhone was introduced. Any brick with a touch interface does not fall into that category I'm afraid.
You wrote "they completely ripped off the design and layout" of the Palm Pilot. The iOS layout owes as much, if not more to the Newton than to the Pilot.
Any brick with a touch interface does not fall into that category I'm afraid.
Absolutely. For example, Microsoft managed to develop a touch phone interface that owes very little to the iPhone. Hopefully Samsung can do the same.
The Newton had an SDK, a vibrant developer community, and a user interface that was one big touchscreen rather than having physical buttons - in 1993. Palm actually got its start selling software for the Newton, specifically their "Graffiti" recognition engine.
If you want to argue about who had specific features first, Newton will usually win - PalmOS was stripped-down to be cheap and dependent on the PC it docked to whereas Newton was conceived as a standalone device so Newton could do things like print or send and receive a fax from day one - Palm got most of those features later if at all.
This case is about the right to sell what is analogous to the movie theatre, the projector, and the camera. Apple found a good way to package them together, and Samsung imitated this, but offered something nevertheless different: a more open and distributed system.
It is Apple and their App store policy that will drive the manufacture of cookie cutter Apps on their homogenous environment.
You're serious? They take 73% of the profit in smartphone market, with Samsung at the second place (26%) and HTC, third (1%), their stock is booming, they have more money in the bank than all of their competitors combined (they can buy Samsung, HTC and Dell and shut them down and still have a few billion dollars left).
This is what I don't get: people applaud Apple for their massive profit margins when in reality it just shows how they're screwing the consumer. Does nobody care about the betterment of the general public -us!?- around here? By buying products with huge profit margins you're spending money on features that you're not getting. And THAT is why I refuse to buy Apple products.
Trade is generally a positive-sum game. The fact that the producer makes a profit means there is a producer surplus but the fact that consumers buy it means there is a consumer surplus too. The general public thinks iPhones are worth more than what Apple is charging, so they buy it.
By buying products with large profit margins you're sending a message that you want the company to stay in business and grow and keep doing what it's doing.
> By buying products with huge profit margins you're spending money on features that you're not getting.
No, part of what makes Apple so valuable is that they resist adding more "features" than the bare minimum, in favor of trying to preserve their best feature: simplicity.
'Consumer surplus' is an economic term, and it's simply a calculated or derived quantity. The fact of the matter is, marketing can change opinions on what a product is worth, or whether it should be bought. Surplus, in other words, is very much manipulable by marketing and advertisement. Consumers think iPhones are worth buying because Apple managed to convince them, and their friends, of it. Not because they may inherently provide more utility/enjoyment over their lifespan than a product from a competitor.
I don't mean to imply Apple products are overpriced in general. I mostly just prefer to discount/devalue marketing when making decisions on what to buy, and instead focus on the features that are important to me.
The standard free market theory is that profit attracts competitors that enter the market and drive down those profits. They would have gotten away with it too if it wasn't for those pesky patents.
Well, I enjoy using my Apple gears tremendously and they enable to do a lot of things that I wouldn't be able to do otherwise. I'd rather pay a $400 premium on a MacBook and have peace of mind for two years. People pay 100 times more for cars and housing.
Obviously I'm not implying that you or others don't care about 'peace of mind' and are cheap bastards who never pay for anything :) - it just happens that you don't find a MacBook or iPad or iPhone as valuable for you and your lifestyle as I do, and purchase what suits you best.
That's just it: Apple has managed to market its products, and especially its mobile devices, as better-no-matter-what. They're consistently behind the punch and offer a pretty feature-dilute experience.
It's also been mentioned that you pay for the "peace of mind," but can anybody here actually quantify what that means on a mobile device? I also find this really ironic because this comes after antenna-gate which most people seem to have forgot. We're consistently told by the media and Apple's marketing that buying from them is a safe bet, has this ever actually meant anything?
You're certainly entitled to your opinion, but I disagree. I find Apple's strategy more solid and sustainable than their competitors'.
BTW, I just wanted to say you have a GitHub link on your HN profile that leads to a 404. I thought maybe that was a mistake and you might want to fix it :)
It seems like essentially the same strategy that lost them the desktop wars after taking an early lead with the Mac. I don't see why we should expect things to be any different this time, although their vertical approach is better suited to mobile.
Apple can't really win on market share or their business model would be impossible to sustain on anti-trust grounds alone. The iPod was the only exception/fluke and IIRC there were some rumblings from the EU about it. The Bush DOJ was too 'business friendly' to worry much about it. Apple could make a market-share grab anytime they wanted to but they also realize it's suicide to do so. Better to own 30% of the market and 75% of the profits than 75% of the market and 30% of the profits. I don't know if they can sustain that but they probably won't shake things up until they are forced to. Don't mess with a good thing right?
>The fact is that they never took an early lead with the Mac
@eddieplan You might not be old enough to remember but the macintosh and earlier apple computers were the first commercially successful computers for the home market.
I can't see a meaningful analogy with the old Apple; to assert one is to assume that totally divergent situations (Apple owning a market wholesale, versus being a niche player) and companies (Apple 2012 is very different from Apple 1998) somehow combine in a way that papers over the very real changes that have happened internal and externally.
If by "strategy" you mean patenting obvious and likely things that already existed and then litigating the crap out of people, you may be right...this trial has set a precedent that might make that sustainable for them.
I chuckle every time I hear this. How much profit of the web server market does Microsoft take with IIS vs. the free alternatives like Apache and Nginx?
Who wins in the Server OS market of Windows Server vs. Linux/BSD? Who dominates the web dev tools market of Visual Studio vs. Eclipse/etc. ?
The same arguments you make can be made against the above too.
The idea of profit share as the metric was hyped up by the Apple fan blog network of Gruber-Siegler-Asymco etc. First, when Android had lower market share, they made numerous claims and 'analysis' that said Android could never overtake iPhone. When that did happen, for some time, they added the iPad to the mix by making it iOS vs. Android instead of just the mobile market and declared Apple the winner. And then later came up with the profitshare argument. Looks like the only metric that matters is what makes Apple the winner.
Since when did profit become the one and true metric?
I realize that they're writing what their audience wants to read, my only peeve is how much airtime their posts and arguments are given on HN. Meanwhile Paul Thurrott's Winsupersite is hellbanned on HN just for being a Microsoft watcher site. Draw your own conclusions.
Since when did profit become the one and true metric?
This is like wondering whether you'd be better off running a grocery store rather than a software business. Profit is the only metric. The idea that this notion started with Apple is strange.
Of course profit is ultimately the metric that counts.
But time and time again in the tech world we've seen that it's much easier to build something cheap and ubiquitous and eat your way up the value chain than it is to start at the top and try to tenaciously cling there. It didn't work for Apple last time and I think it's starting to slip for them again now.
What makes you include GMail in that list? It has, by all measures, failed to move up the value chain, its revenue is completely eclipsed by that of Exchange. (Disclaimer: I work at MS.)
My question in response would be: what accounts has Microsoft lost to Gmail in the past couple of years?
From my connections, I'm aware that much of the startup world is on some mix of Gmail for Domains, Google Apps, and/or Mac for desktops/laptops. Microsoft really doesn't play.
Granted, those are small accounts, but I've also seen some household name established businesses ditch Exchange for Gmail. And in a world for which changing enterprise platforms almost universally elicits dread, the announcements were met with cheers. Really loud cheers.
And to answer in part: again, read Christensen. It's not that the cheap competition generates more revenue (though in some cases it does). By that metric you're making the same strategic error as recoiledsnake. It's that by growing marketshare, disruptive innovations suck the revnue out of the market.
It's what Red Hat did to Sun. It's what Craigslist did to classified advertising.
Profit is not the only metric. Market share is a valid metric to compare products (as long as you have a sustainable position).
If android was selling five times as many units as apple, but with only 15% the margin, then apple would still be the most profitable, but would be losing the mindshare war.
Eventually devs would be concentrating their efforts on android first, and perhaps only for android. In the long term, marketshare is the more important metric.
This is '99-bubble "sell the eyeballs" thinking. The point of business is profit. You can defer profitability, for instance to achieve market share in a market where having the greatest share promises future profits. But for that to be meaningful, you have to have a story about how buying market share with lower profits is going to offer a return on investment in the future. What's Samsung's story?
You must have missed the part where I wrote as long as you have a sustainable position.
In the case of Apple vs Samsung, the smart phone market is at a different level of maturity that lack of market share is not going drive developers away from iOS, but if we were much earlier in the market then it would be a significant issue for them.
What's Samsung's story?
I don't know what sort of margins Samsung is making on their devices, but they don't have to make as much per device as Apple to still be a success.
He's wondering why Gruber, who supported the "losing" side in Apple vs Microsoft (as measured over any timeframe besides the last 12 months or so) had such a damascene conversion. I doubt he'd have any issue with a weirdo that consistently supported the most profitable corporation in any market. It woukd still be weird, but at least consistently weird.
Looking at only the earnings reports and comparing profits is meaningless. If you follow the Gruber link it shows that Amazon's net profit is only $7M. That does not mean Amazon is having trouble making any money. It's that it's costs of expanding are swallowing the profits. Apple has a ton of cash in the bank lying around because they don't see a need for using it. Directly comparing the numbers makes no sense whatsoever except to people who's profit depends on telling people what they want to hear. i.e Apple this week is better than X in Y metric and hence Apple wins and X sucks, where X and Y are carefully picked.
Wasn't it just yesterday that Gruber was comparing revenues from a hardware business(iPhone) to Microsoft's primarily software business, instead of profits which would make more sense?
You're talking about John Gruber. I'm just talking about profit. Obviously, companies routinely defer profitability. Is that what you think Samsung, or any other Android vendor for that matter, is doing? I don't. Comparing the iPhone business with Amazon is an apples/oranges comparison. Comparing Samsung's Android business with the iPhone isn't.
Like Gruber, don't like Gruber, I don't care. But let's not introduce the meme that "profit" is a meaningless metric. It is the only metric. Companies that are optimized for something other than profit today are doing so in the service of profit, and nothing other than profit, tomorrow.
"Revenue", less profits, is money that doesn't belong to you.
And here I thought we were talking about business.
"Revenue", less profits, is money that doesn't belong to you. Keeping score with it is pretty silly. Want a lot of revenue? Start a grocery store, but sell everything at a 10% loss.
But Android is not there to make money, it is there to stop Apple taking over mobile and so cutting out Google from that business, so Google as a whole makes money.
> I chuckle every time I hear this. How much profit of the
> web server market does Microsoft take with IIS vs. the free
> alternatives like Apache and Nginx?
>
> Who wins in the Server OS market of Windows Server vs.
> Linux/BSD? Who dominates the web dev tools market of Visual
> Studio vs. Eclipse/etc. ?
In the not-to distant past (early 2006), I worked on a system which hosted millions of domains on Linux and Apache hosts. Microsoft called our company and offered them mega-bucks to switch the system to Windows and IIS so that they could increase market share. You can confirm this with netcraft - http://news.netcraft.com/archives/category/web-server-survey... . And we weren't the only shop they called with similar deals.
In this case, the one with the profit bought themselves 15% marketshare. I had real fears around that time that web stacks were going to start looking an awful lot like the desktop ecosystem.
Say company X sells 200 phones and makes $1000 profit.
Company Y sells 150 phones and makes $10,000 profit.
In this case we are comparing apples with apples. So it is a valid metric of comparison. In the same reasoning, if company Z sells 200 phones and loses money then obviously that is bad and company Z could potentially go bankrupt.
Well, company X is shipping its phone with an almost free (as in beer) software stack. If their entire stack was paid software, there would have been some more margin for profit. I cannot even guesstimate on how much would their profit share increase (given that higher price would mean lower sales), but it might be significant.
Google and Apple may have, at a high level, opposing strategies, but Apple's approach is being adopted more and more (app stores, having more control on the experience, etc...) and companies wouldn't do that if it wasn't working. Hell Google's own products, the ones where they stamp "Google" on the back of the device, are very much in the line of Apple's usual MO. Sure Android will always have a few more "geeky" features (app side-loading) but the Nexus 7 is very Apple-like in it's execution (...and it's great!).
tl;dr - Their business models aren't as different as the old Windows vs Mac comparison.
Apple's strategy assumes that a single company and a single line of devices can indefinitely command the lion's share of the most important computing platform of our time. This just doesn't seem tenable to me. For every consumer that's completely satisfied with the Apple experience there will be 3-4 others that prefer some other product for any number of reasons.
When in the history of the world have we ever seen a single company and a single line of products dominate a mass-market consumer segment for more than a few years?
>When in the history of the world have we ever seen a single company and a single line of products dominate a mass-market consumer segment for more than a few years?
I think they realize that this position is no more sustainable than their position was in the desktop market and they're acting out of fear.
If you've used a recent, high-end Android phone you know that the quality gap is mostly gone and that the apps that most people care about are now available on both platforms. Apple is not going to be able to sustain their astonishing profit margins without the help of the courts.
Don't forget that Apple has a mountain of cash and an insane advantage in the tablet market. Macs are on the rise too. All this can be used to keep people in the Apple ecosystem. (iCloud is surprisingly meh, though.)
Not saying that Apple will succeed, but the future doesn't seem so clear to me.
It's the apple ecosystem that's the problem for me. Not everything they touch turns to gold, and force feeding us the lead with the gold is a becoming a turnoff.
I think Apple is here to stay but I don't see how they can sustain their phenomenal profit levels if their market share keeps slipping unless they keep winning in the courts.
What I'd like to see is a healthy market with two or three real competitors. It's much better for consumers and developers than another decade of monoculture protected by patent minefields.
What I'd like to see is a healthy market with two or three real competitors.
As would I, although I would like that market to offer real choice, and not just one first-mover and 1-2 copycats. Microsoft, Palm and Nokia managed to figure out how to make a touchscreen phone that isn't a warmed-over iPhone, I hope this provides the push for Samsung to do the same.
I deeply distrust MS as a company but I agree they deserve some credit for striking off in their own direction. I don't think Android is as similar to iOS as many claim but I would like to see more experiments as bold as WP8 in this space.
>They've refused to compete with Android on price, features, and form factors and the market has punished them for it.
In what universe did the market punish them? Apple has shipped 250 million phones and made 150 billion dollars in revenue in the five years since the iPhone shipped[1]. Each iPhone version has sold more than every other version combined[2].
They currently have near-monopoloy perceived first-mover prices and margins as 'the only credible device' (iPad) and 'the coolest device' (iPhone). They have the perception as being 'the only system with the good apps' (iPad) - noticeably they don't have that any more with the iPhone. Realistically, how long can they keep it with the iPad and, once lost, what means do they have of getting it back? And what's Apple's plan to maintain its current market advantages of consistency once the mobile market moves from high-end luxury to commodity that needs a tiered product range?
How many new Android devices come out per year, even just from the major top-tier devices? How many from Apple? To sustain the current position, Apple have to win and be lucky every time. Android can afford below a 10% hit rate and it'll still innovate faster and grow more strongly as a platform than iOS.
Apple now are in much the same position as they were the first time they lost Steve Jobs. Their five year outlook is, IMHO, grim - their profits come overwhelmingly from iOS but it's under heavy attack and has no obvious strategy to grow their base without cutting off what made them a success.
Apple are (medium-term) on the crest of a wave. Their long-term outlook is only down IMHO, and this time they can't bring Steve back.
I think they are trying to commoditize the market so that Apple is not dominant. But Apple have not really joined in, and have managed to keep a large and profitable portion of the market, indeed grown that since Android launched. So so far Android has largely failed on that basis.
to me, this comment seems to be phrased a tad bit negatively, even though it may be factually correct.
a lot of people like to talk about "android fragmentation". while the variety of devices out there can sometimes be annoying as a consumer and developer, i tend to think of it as "android diversity" instead.
to me, it's wonderful that your so-called "poor people", who may not even have a regular computer and for whom the "premium" experience that apple is not an option, still have an opportunity to participate in the "modern world". even if it's with a device that gearheads would turn their noses up at.
technology liberates, informs, and elevates people. the fact that the android ecosystem is flexible enough to accommodate a huge demographic is a strength, in my mind, and not a weakness.
Just because I acknowledge they are poor people doesn't mean I think Android targeting them is bad. Android is a net positive for the species.
Having said that, it would be even better if more companies were willing to take risks and innovate like Apple has. Instead, most corporations are pathetically conservative, unimaginative, and basically stupid.
They've refused to compete with Android on price, features, and form factors and the market has punished them for it. Expect more attacks on Android seeking ridiculous damages for non-essential details of mobile UI design.
However, I strongly suspect Apple is going to regret these tactics in the long run. Once the tiger is out of the cage there's no telling who he will bite.