How Court Battles with Samsung Might Change Apple’s Thinking

| Columns and Opinions

Apple has won another court battle with Samsung over patent infringement, but the reward was small and hasn't slowed Samsung down at all. How might these pyrrhic victories affect Apple's long term thinking?

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There is no doubt that the current system of software patents, routine infringement by Apple's competitors, and subsequent court battles has done little to help Apple maintain the tremendous technical lead it had when the iPhone launched in 2007. Samsung's apparent strategy of infringe-litigate-stall has proven successful. The tiresome complexities of court cases combined with resourceful defense attorneys haven't provided Apple the results it has deserved.

My question is: how will the outcomes of these trials affect Apple's long-term thinking?

The Copy Proof Approach

One direction Apple might take with more energy, I surmise, will be to leverage its cash holdings to continue investing in robotic manufacturing. The goal will be to spend a lot of money developing expensive manufacturing techniques that can produce valuable, beautiful products that are nevertheless affordable. But even more important is that they'll be difficult if not impossible to copy.

One sign that Apple is headed in this direction is the (now expected) use of synthetic sapphire. As I've mentioned, sapphire is not just an excessively expensive way to improve the iPhone's scratch resistance. Looked at in that light, it has a questionable ROI. In fact, sapphire fabrication techniques suggests that Apple may be after more than the durability of the material. If Apple can pull it off, the material can potentially change the entire look and feel of the smartphone, just as Apple's developments into machined aluminum paid off in the past.

The nice thing about hardware manufacturing techniques is that they're trade secrets. They don't have to be exposed publicly, like software patents. There no need for someone in the government to approve the patent application and then post it on public file for all to see. Proprietary manufacturing techniques with sophisticated robots, done more and more in the U.S., relatively safe from the prying eyes of Asian competitors could provide Apple an advantage where software patents never could.

Once upon a time, Steve Jobs referred to the Mac and the PC wars by saying, "The PC wars are over. Done. Microsoft won a long time ago." It was time to move on to the next Big Thing. Now that Android has ensconced itself into the psyche of smartphone customers, perhaps the next Big Thing can't be found in trying to win more court battles, achieve import bans, or desperately pull an innovative rabbit out of the hat.

Instead, I have a hunch, Apple will lean more heavily toward things that are extremely hard to copy and, in parallel, provide tremendous appeal and value to the customer. For example, the Apple iWatch will help millions better understand their health and fitness, and to do that Apple will exploit its formidable expertise in personal data security.  Plus, Apple's recent hirings and new trademark registration suggest that the iWatch will have a gem-like quality. It may well be something the owner will be proud to wear and consider as a beautiful item of value in addition to its functionality. That will help justify the price.

Back to sapphire and smartphones. Advanced manufacturing techniques with sapphire could provide ample opportunity for Apple to clearly, in a tactile way, differentiate itself from the competition's plastic cases and glass displays.  That could be critical in the smartphone wars.

The Next Generation Apple TV?

All this might explain why Apple's perpetually rumored next generation Apple TV project hasn't seen the light of day. Perhaps Apple has felt that, in light of Android, all the investment they've made to date in innovative software would be too easy to copy. The flood of small streaming TV devices shows that a modern tech giant can license some content, throw some me-too software on some silicon, design it to plug it into the TV's HDMI port and compete with the Apple TV. Perhaps Apple isn't looking forward to the copyability of the TV project it's been working on -- in its current state.

The Future is Advanced Hardware

Over and over again, going back to Apple's legendary court case against Microsoft (1988-94) for copying elements of the Macintosh GUI, competitors have shown that they're all too willing to create products that look, function and act like Apple's. After Apple has done all the hard work of research and engineering, it's not too hard to reverse engineer, mimic, infringe on patents, litigate, stall and make money from Apple's innovation.

On the other hand, hardware that feels good, is durable and beautiful is never going to be just a commodity. It requires billions in investment, but I'm betting that Apple is, more and more in the future, going to focus on sensational hardware that's very hard to copy.

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Sapphire gem via Shutterstock.

Comments

ibuck

Made in the USA? If Apple is able to robotically assemble its devices, it can do that in the US, where, presumably, the only onsite laborers are a few highly paid engineers. Not a lot of low-paid assemblers who are prone to smuggling parts out for a price to rumor sites or case manufacturers. More secrecy = less copying.  Thanks for this analysis, JM.

Intruder

Waiting for the inevitable “Apple stole the GUI from PARC” comments….

John Martellaro

As I recall, Apple bought a license from PARC.

Jules Hobbes

I guess Jony Ive would be the perfect guy to pull this off.
Let’s hope so.

wab95

I think that this is insightful analysis, John.

I commented just the other day that Western tech companies, and the courts to which they turn to adjudicate infringement cases, as well as Western based media, do not understand what they are up against in these largely Asian titans located in the so-called Asian tiger economies. Western commenters and analysts too often posit Samsung’s documented and now court-verified IP theft as company-specific, i.e. that there is something about Samsung’s corporate culture that elicits and nurtures this behaviour. To be sure, there is, however this goes well beyond Samsung and is a well documented feature of corporate corrupt practises that is region-wide and has been observed from the Near East to the Far East and all points in between, including the Indian Sub-Continent. And by documented, I mean by local journalists and criminal investigations.

The current approach by tech companies, specifically Apple, is a losing proposition, because the current legal system and its rules of engagement in the West favour cheating when one takes the longterm view. Despite Samsung’s now well-documented approach of infringement, litigate and stall, the strategy continues to work with maddening efficiency simply because the courts, and the laws that back them, are not adaptable or nimble enough to counter and protect IP against these tactics.

The legislative branches in the West need to modify and adapt new laws that permit asymmetrical precision strikes against specific targets and types of activities in a way that, to many, would seem unfair by today’s standards. So too is theft. If you want to get Capone, you have to ‘get’ Capone. If the West wants to protect its IP, it has to get Samsung and others who will emulate their tactics. The measures have to be targeted, draconian and non-recoverable, just as they often are in Asia when a government decides to end an enterprise that it can no longer afford (whether that conclusion is internal or imposed by external pressure). I question whether the West has the stomach for this.

Whether or not that occurs, Apple’s continued focus on hardware, as you’ve suggested above, as well as in best in class user experience supported by a coherent ecosystem, as a industry and therefore consumer differentiator, remains the best response that they, as a corporation, can muster as a response. Apple’s continued growth in PC marketshare amidst industry contraction is proof of concept.

CudaBoy

Let’s be clear, Apple stole the “look and feel” from xerox. There was NO license. I welcome evidence to the contrary. There was no NEED for a license at that point.Steve promised non competition w/xerox vis a vis workstations etc. Xerox didn’t think “L & F” was defensible based on current law anyway. Then later Apple LET Microsoft look at the OS and in fact made a license deal. Then Apple sues M’soft for “look and feel” and xerox piles on thinking if “look and feel” can be protected then Apple owes Xerox as well.  Well, Apple ate crow and they all lost as “look and feel” is not tangible enough for protection. Plus, there was a previous DEAL bet. Apple and Msoft in place just to make things even fuzzier.
  Not the first time Steve went back on a promise; he also promised to stay out of the music business as part of the huge payment and settlement to Apple Corp.  Then later iTunes included MIDI functionality (very cool!!)  but then Apple Corps sued AGAIN and won because MIDI is a music interface. Even later Apple finally settled for a rumored half a billion bucks to Apple Corps to use the name Apple and end the acrimony. 500 mil ends a lot of acrimony.

iJack

“Apple stole the “look and feel” from xerox”(sic)

The Court said “no,” CudaBoy.
http://nyti.ms/1hBpM3T

CudaBoy

Well, that’s what I stated, that “look and feel” wasn’t gonna fly hence xerox lost but that was only an after the fact ancillary filing in the bigger Apple v. Microsloth case. Who do YOU think invented the WYSIWYG screen and the idea of icons on a screen and a mouse? It wasn’t Apple, and they never purchased it, and Steve made a “promise” to xerox so…......
Okay how’s this: Apple lost the Suit against Microsoft for almost the same reason Xerox lost to Apple. Not literally, but close. This just reinforces my theme of business and the lack of “morals” thereof.

dgerzeeboy

Okay, CudaBoy. Point taken. Apple is Satan and Hell is their future. Can we move on now?

JonGl

CudaBoy. Have you ever used Xerox’s GUI on their old systems? I have (on one of their desktop publishing systems), and while on the surface it was something like the Mac, it couldn’t touch it as far as usability. It was a mess and a hodgepodge. Also, its mouse had multiple buttons—but at least it was an optical mouse (1987!). Apple may have taken the concept, but they did more than copy it. Also, they didn’t copy code which was something Microsoft did do.

As to the issue today, though, I think that what we are finding is that the rampant copying of IP is already having a drastic effect on innovation. It is discouraging companies from sticking their necks out, because as soon as they do, they know they’ll be copied and have their heads handed to them by the copiers. If what John is describing is true, and I think it is, this could be the beginning of the end. Everybody wants to play with the toys, but nobody wants to make the effort it takes to actually come up with and make the toys. Parasites…

Lee Dronick

See today’s Joy of Tech comic

http://www.geekculture.com/joyoftech/joyarchives/1997.html

Intruder

I was not proven wrong…

mrmwebmax

+

CudaBoy and all,

Here’s an interesting look back at what was going on in the late 1970s in computer science….

http://www-sul.stanford.edu/mac/parc.html

ibuck

Apple mavens, it’s useless to try to disabuse intruder, cudaboy, or bosco, and people with a grudge against Apple, of a viewpoint formed with a mixture of inaccurate anecdotes, disinformation, mischaracterizations, wishful beliefs and emotions (like envy, fear, anger, etc). Some folks just cling to their opinions despite evidence to the contrary. Reasonable, intelligent people change their minds when they realize they did not have all the facts. But there’s a sizable contingent of people who feel that doing so makes them wishy-washy, so they sometimes go to extreme lengths to deny the truth and support their position. They reveal themselves when they say things like, “They’re never going to convince me that…”

Apple has a history of taking available ideas and making them better, bringing high quality products to market that are more elegant, simpler and more user friendly, and help people have better lives—without a computer science degree. Apple is trying to be profitable making great products, not striving for highest market share. Apple products cost more than most cheaper imitations due to their long development time and their high quality. And that galls some, especially if they cannot perceive the differences between a quality product and a knockoff. Resolving their issues is not our responsibility.

Intruder

Methinks you misunderstood my post, iBuck. I was predicting the posts from CudaBoy et al.

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