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  (Source: Jason Mick/DailyTech LLC)
Steve Jobs gets his final wish, companies appear ready to fight to the death in court

Apple, Inc. (AAPL) and Samsung Electronics Comp., Ltd.'s (KSC:005930) have made it clear that they're over cooperating and are gearing up for total war.

I. Samsung and Apple's Settlement Talks Collapse

According to a report by The Korea Times, the phone industry's two largest players, and two of the world's largest intellectual property owners, walked away from the settlement table despite the efforts of Magistrate Judge Joseph Spero to encourage their chief executives to work out a compromise.  With settlement talks failed the "nuclear war" will begin with Apple's trial, which is scheduled for July 30.

For Apple and Samsung the cost of battle may be enormous.  Both companies could see their products banned, at least temporarily in certain regions.  Samsung may be forced to abandon billions in chipmaking revenue it takes in from Apple on a yearly basis.

And Apple may be forced to find a new supplier for its smartphone CPUs.  With past trials reportedly not going well, that could mean inferior product and fewer upgrades for the iPhone.

Apple CEO Tim Cook sounded dejected in his company's last financial report, commenting, "I've always hated litigation and I continue to hate it we just want people to invent their own stuff."

Samsung v. Apple
Whoever wins in Samsung and Apple's full-blown court war could have a monopoly on the mobile market. [Image Source: The Telegraph]

But despite the seemingly promising signs early this month of a bilateral agreement to cut the number of patents asserted in the companies' lawsuits against each other, the pair could not reach a cross-licensing agreement, as both handset makers believed the other should be paying it licensing fees.

With Apple scooping up large LCD screens for its iPhone 5 (Samsung is the world's largest display manufacturer), the two companies' mutual business has reportedly ballooned to $12B USD for 2012 (up from $8B USD in 2011), even as the pair's public relationship has appeared to deteriorate drastically.

II. Steve Jobs Gets His Wish -- Full Blown "Nuclear" War With Samsung

But ultimately the two companies' leadership seem to believe they stand more to gain by destroying each other, versus working together.  

Samsung current has a larger slice of the smartphone market -- 29.1 percent compared to Apple's 24.2 percent in Q1 2012.  But Samsung trails Apple in profit, making just $4.45B USD in profit, compared to Apple's $11.6B USD haul.

Samsung girls
Samsung's attractive models beat out Apple in unit sales. [Image Source: Shootspeak]

Both companies control close to two-thirds of sales and 99 percent of mobile profits, and their cases are built on questionable legal foundations from a technical perspective.  Samsung is suing Apple mostly based on wireless standards patents.  But Samsung should be obligated to license those patents to Apple under the "fair, reasonable, and non-discriminatory" (FRAND) rules that govern standards patents.

Samsung is currently under investigation for its questionable discrimination of Apple licensing-wise.

Apple on the other hand, may have a bit of a case against the original Galaxy S, which narrowly mimicked the iPhone 3GS in case appearance and GUI (much more than any other Android).  

iPhone 3GS v. Galaxy S
(Click to enlarge) 
Samsung's TouchWiz version on the Galaxy S (left) presented a near identical interface, visually, to the iPhone 3GS (right). [Image Sources: Slashgear (left); Ubergizmo (right)]

But Apple's case becomes much more tenuous when you consider that Samsung’s newer handsets bear far less similarity in case appearance or GUI to Apple's new handsets.  
 
Still patent disputes are often less about technical merits and more about the persuasive power of a company's pricey legal team.  In that case, “Apple v. Samsung” will be fought by lawyers when it goes to trial this summer in U.S. federal court.

But one thing is certain; the collapse of settlement talks would have greatly pleased the late Apple founder Steve P. Jobs, even if his company ends up losing this war.  He vowed near his time of death to send Apple into full war mode and destroy Android at any cost -- or perish trying.

Steve Jobs
Steven P. Jobs' dying wish of "thermonuclear war" with Android has been fulfilled.

He commented, "I will spend my last dying breath if I need to, and I will spend every penny of Apple's $40 billion in the bank, to right this wrong. I'm going to destroy Android, because it's a stolen product. I'm willing to go thermonuclear war on this."

Well, that "nuclear" war is now almost upon us.

Source: The Korea Times



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RE: Yawn...
By Tony Swash on 5/25/2012 2:46:56 PM , Rating: -1
quote:
Now I assumed you understood economics, but I'll break it down.

More units sold=lower prices=better value proposition for users/carriers.


Except that is simply not happening is it? Apple make lots of profits from iOS. Every single Android handset maker except for Samsung don't make any profit (which is after all the purpose of being in the business) and even Samsung makes a fraction of the profits that Apple do. Consumers can get iPhones at the same price points as equivalent Android handsets. So where and how is your hypothesised "More units sold=lower prices=better value proposition" manifesting itself?

quote:
Having the greater market share also means you have control over the direction of the market.


How? In what way does Android being on more handsets allow someone (Google? Samsung?) to drive the market? How is 'driving the market' manifested in the real world? This is just jargon.

quote:
And you're beginning to see Androids effect on the direction of the market- Apple has started to follow Android's lead by integrating features that Android has had (in some cases) for years prior to iOS and creating products that can compete with Android's value proposition (downmarket) to recapture market share.


I don't think Android is driving Apple in any direction, I think all the evidence is that Apple maps it's iOS and hardware strategy out years in advance. One of the reasons Apple is so good at what it does is that it thinks less about the competition than other companies and more about the products it makes.

quote:
quote:
none of the handset makers seem to be be able to make any profit doing so, with the exception of Samsung,

Why do you seem to think this has anything to do with Android, please provide proof instead of supposition.


I didn't say that Android handset makers failure to make any profit is the fault of Android, I actually think it's because they have piss poor management. The point I was making is that having the largest share of the handset OS market does not deliver economic success to those companies who operate in that ecosystem. That point was part of a larger point which was to pose the question how does larger market share manifest itself as some advantage to anyone (OEMs, consumers, whatever) if it cannot deliver more (or any) profits, better software, better content, better developer economics or better peripherals. You tell me.

quote:
Greater competition is ultimately good for the market and end users.


That may be true, if only Android could help create successful and sustainable businesses. It appears to be not doing that with the exception of Samsung.

I think the big problem here is lazy wishful thinking. People who cheer handset market share do so because back in the days of the PC days of the 1990s market share did lead to actual and tangible benefits, there was more money, more software, more compatible peripherals, more developers clustered around and feeding off of the dominant platform which was first MSDOS and then Windows. So some folk seem to think that there is an iron law of platforms, the bigger the market share the better everything is. But the handset market seems to behave nothing like the PC market. Now market share alone seems to lead to no tangible benefits for anyone, OEMs, developers or consumers.


"So if you want to save the planet, feel free to drive your Hummer. Just avoid the drive thru line at McDonalds." -- Michael Asher














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