Aug 26, 20125 min read

Will Apple’s Patent Victory Reshape The Smartphone Market?

This is the question on many minds following the

dramatic Apple victory over Samsung in its patent case in US federal court on Friday. Many bloggers, pundits and tech journalists are now mulling over the implications and considering “What comes next?”

Decrying the $1 billion-plus verdict Samsung immediately predicted the sky will fall on consumers: “It will lead to fewer choices, less innovation and potentially higher prices,” the company statement claimed. Mostly hyperbole, that’s unlikely to happen. Indeed the verdict is unlikely to impact Samsung in a big way either.

Samsung Unlikely to Be Significantly Affected

The company has more than enough cash to pay Apple off and it can make modifications in future phones that won’t run afoul of these patents. The larger marketing and brand problem for Samsung is that it has been labeled a “copycat” and its products derivative of the iPhone. That is of course largely an accurate characterization.

Longer term the company will have to chart its own design and development course that doesn’t rely on competing products for “inspiration.” That would be a good thing and offer more (not fewer) choices for consumers.

Samsung will remain the world’s largest smartphone maker. This verdict and its fallout are unlikely to dampen Samsung sales around the globe (though perhaps they will in the US). And until the legal process runs its full course Samsung is unlikely to change anything in the near term.

What’s Next in the Case?

While Friday’s verdict conveyed the impression that Apple v. Samsung was over, it’s not. Samsung will be making post-trial motions to reduce damages, attempt to alter the findings announced in the verdict and position the case for appeal, which the company has already indicated it will pursue.

For its part Apple may now seek injunctions against the range of infringing Samsung products, which includes most of the Galaxy S line of smartphones — though not the newest Galaxy S III phones. If successful that would mean they could no longer be sold in the US.

In a parallel South Korean patent case, also decided on Friday, the court “banned” Apple and Samsung products prior to the current generation. That case was perceived as victory for Samsung, though the outcome was mixed for both companies.

Based on the US jury’s finding that Samsung “willfully” infringed some of Apple’s patents the judge has the authority to impose “treble” (triple) damages and increase the award against Samsung to over $3 billion. Judge Koh may be disinclined to do that, recognizing that the money really isn’t important to Apple and not wanting to give an appellate court potential reasons to find fault with the decision.

There are still many other cases pending between Apple and Samsung around the world. There’s also another suit in the US that was filed by Apple against Samsung in January of this year. So the global legal struggle between the two companies is far from over, unless they come to some sort of mutual licensing agreement.

Will We See Changes Smartphone Design?

There were seven Apple patents at issue in the case (and five Samsung patents that received little recognition). The “889” design patent (re the iPad) was the only Apple claim that Samsung was not found to violate. Two of the patents that Samsung infringed were hardware-related but the rest were about software or interaction with the smartphone.

Of the seven Apple patents at issue, three so-called “utility” patents had to do with various features of the iOS user experience: the ability to increase the size of a page with a single touch, the “bounce-back” feature and functionality that makes distinctions between single and multitouch gestures. An additional “design” patent was about the appearance of the icons on the screen. This was the source of Samsung’s grousing about Apple being able to “patent rectangles.”

As I indicated we’re not likely to see any immediate changes to Samsung software or the Android OS. However there may be some changes or adjustments in the Android OS at the margins in the next year. (Google is probably debating the impact of the verdict on Android even as we speak.)

That of course raises the question of whether Apple will now go after Google directly.

Will Apple Use This Against Google?

In one sense Apple has been going after Google from the beginning. Steve Jobs maintained that Android is largely a rip-off of iOS and famously vowed “thermonuclear war” against Google. Much of the look and feel of Android does mimic iOS. However Apple has also “borrowed” from Android — the notifications center for example. I’m sure there are other examples as well.

Motorola sued Apple before Google acquired the company but recently filed a new action before the US International Trade Commission (ITC). The ITC just issued a decision against Motorola in the earlier case. Apple is also litigating against Motorola in federal court in Wisconsin. So the companies are directly suing each other already.

It’s unlikely that after Friday’s verdict Apple will immediately turn around and file an action directly against Google (as opposed to Motorola). But it is possible that all this is building to a direct patent-related attack on Android. Yet Apple CEO Tim Cook has said that he prefers alternative dispute resolution to litigation.

(See the new postscript below for Google’s statement about the verdict.)

Does the Decision Help Microsoft?

There has been some discussion about whether hardware makers will now turn to Microsoft’s OS to compete with Apple and pull away from Android. I suspect there may be some additional interest in Windows Phone 8 because it’s different than iOS; however I don’t think there’s going to be any major new rush to embrace Windows.

Most hardware makers will still favor Android unless Nokia-Windows Phone sales start to pick up. If consumers show interest, only then will more hardware makers jump on the Windows Phone bandwagon.

A smart marketing move for Microsoft might be to play up the fact that Windows Phones are different from Android (and iOS), and position them as a kind of personal “statement.” That’s what Apple did in its classic and very successful “Think Different” campaign, back when it was the underdog.

But in answer to the question I posed in the headline: Will the verdict alter the smartphone market in a fundamental way? No — I don’t think it will.

Postscript: Google offered a statement (via TheVerge) in which it sought to both criticize the verdict and suggest that Android won’t really be impacted:

The court of appeals will review both infringement and the validity of the patent claims. Most of these don’t relate to the core Android operating system, and several are being re-examined by the US Patent Office. The mobile industry is moving fast and all players — including newcomers — are building upon ideas that have been around for decades. We work with our partners to give consumers innovative and affordable products, and we don’t want anything to limit that.

It is accurate to say that the patent claims in the specific case don’t go to the heart of Android. It’s also correct that an appeals court will look at the verdict.

But while it’s also accurate to say that many of the underlying concepts and ideas behind mobile technology today have been around for decades Apple did establish a completely new mobile design trend with the iPhone in 2007. That trend was promptly followed — to what degree in violation of patent law is being debated — by almost all the major hardware OEMs, including Motorola, Samsung, LG, HTC and others.

Related Entries