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?
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.
Sapphire gem via Shutterstock.