When I am in Hong Kong or Beijing, people often accost me on street corners trying to sell me “copy watches” like fake Rolexes. In fact, one of the funniest encounters I have had was at the Great Wall of China, where a guy in a trench coat chased me down a street. When he opened up his coat, it was full of fake watches.
On just about every street corner in Hong Kong there are carts full of fake Gucci, YSL, and Burberry bags being peddled to anyone who is willing buy them. New Yorkers are familiar with this scene, as fake bags show up on street corners there too. The last time I was in Beijing, someone even tried to sell me a knockoff iPhone. This blatant copying of products, also known as counterfeiting, is bad news for the product makers, and in the end hurts consumers, since they get inferior products that are a waste of their money.
Much of the reason Apple filed the lawsuit against Samsung lies in the idea that Samsung copied the iPhone and its software, instead of innovating on its own and creating new products that could fairly compete in the marketplace. And the San Jose jury’s finding that Samsung did indeed violate Apple’s patents as well as copy some of Apple’s software reinforces this issue of companies innovating instead of copying in order to create competitive products.
I believe that Samsung “copied” Apple’s products in a move of desperation. Although the company had been working on smart phones of its own, it was shocked to see the original iPhone and the impact it had on the overall smart-phone marketplace. So it rushed to market a competing product that borrowed a lot from Apple in order to not lose ground in the market it had intended to lead. Or in essence, Samsung wanted to ride Apple’s coattails and momentum in order to get some of the smart-phone action for itself as a fast follower.
The end result of this suit should be that Samsung and any others wanting to play in the smart-phone market will innovate instead of copy, which would mean that consumers could expect more creative devices in the future. Samsung’s claim that its loss in the suit will only stifle competition is incorrect. In the world of technology, the opportunity to invent, innovate and create new hardware and software from scratch is more than viable. And should companies bump up against patents when creating new devices, they have the option to license those patents when possible. But to just plain copy, as the Apple jury found, is wrong.
Microsoft knew that creating icons like the ones found in Apple’s iOS devices would be copying, so it created a tiling motif that spans its smart phones, Xbox and computing products. The company did this even though some of its patents were being used in Android and licensed these technologies to many vendors using Android in their devices. This reinforces the fact that there are ways to create a navigational UI without copying Apple.
However, the heart of this suit goes back to something Steve Jobs told his biographer, Walter Isaacson. Jobs believed that Google’s Android software was a clear rip-off of iPhone software and vowed to “go thermonuclear” on Google and make it clear that Apple was the true innovator. Well, consider the bomb dropped.
To understand Jobs’ anger and dismay with Google, you need to understand one very important thing from Apple’s past. During the period when Apple was developing the iPhone, Eric Schmidt, the CEO of Google at the time, was on Apple’s board of directors. There’s no question in my mind that Schmidt pretty much went to school on smart phones and their operating systems while serving on the board, and I would not be surprised if he used that information to help Google guide its own efforts in this area. As far as I can tell, Schmidt did not inform Jobs of Google’s decision to develop Android and compete with Apple during this time, and I am sure Jobs felt he was stabbed in the back because of this.
The fact that Android started surpassing the iPhone in smart-phone market share only added to Jobs’ anger, and all of this was at the heart of his declaration of war on Android. The money Apple spends on legal fees is a drop in the bucket to the company, given its $120 billion–plus cash in the bank and the fact that profits rise more and more as consumers continue to buy Apple products. But this win does not take the sting out of the fact that Android represents about 54% of the smart-phone market and is a serious competitor to Apple.
Going after Google would have been more difficult, so Apple chose the most high-profile Android licensee to sue instead. In a sense, Samsung served as the whipping boy for Apple’s Android anger. And this may not be the last lawsuit that Apple has in its arsenal when it comes to trying to protect its intellectual property; it may go after other Android licensees too.
Even with its Android battle, the Samsung suit has a lot of merit for Apple in the long run. It served to keep Samsung on the run. In fact, Samsung is already on path to not copy Apple in the future and will try to create a different level of distinctiveness in future products. And it has put the fear of Apple’s legal wrath in other competitors that copy instead of innovate.
Interestingly, if Apple should agree to license any of its patents to Android smart-phone vendors in the future, that would only add to its financial coffers, since it would get a piece of the action from Android smart phones. This could take a bit of the sting out of Apple’s Android anger.
But consumers, ultimately, should be the big winners here. In the tech world, innovation should be the driving force behind all products shipped. Instead of stifling competition, this case should spur more creativity and give consumers an even broader range of innovative products to choose from in the future.
Bajarin is the president of Creative Strategies Inc., a technology-industry analysis and market-intelligence firm in Silicon Valley. He contributes to Big Picture, an opinion column that appears every Monday on Techland.