Thoughts on Apple and Samsung

Scott Francis
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All along, I’ve found it really interesting how many thought leaders in the startup space and VC space have picked Apple as their whipping boy for patent discussions.

I think the attention has been misplaced.  There are better targets (which, to be fair, have been targeted by some of these same pundits):

  • patent trolls
  • shell companies that only exist to exercise their patents
  • established companies blocking new, disruptive entrants

And yet, I was reading pieces like this, today, which I think are way off base:

Yes, it was a very important day. Innovators – real innovators – were given a chance to show that there is a huge difference between minor features, interface elements and true innovation, as well as between obvious solutions to simple problems and non-obvious ones.

I’m sorry, but as an avid smartphone user prior to the iPhone (if you can really use the word smart to describe those RIM and Palm phones), there was nothing “obvious” about a touchscreen phone that would do bouncing scroll and pinching zoom and a number of other features. If it was *so* obvious why weren’t there a few startups producing these phones?  Right.  And why weren’t any of the incumbents?  Right.  They weren’t innovating in this area.  Apple was (internally and through acquisitions that, at the time, people thought were frivolous – like Fingerworks).

As Dan Frakes tweeted:

When the iPhone debuted, it was widely criticized for having no buttons/keys. Now people think the iPhone’s design is “obvious.”

All the good inventions look more obvious after the fact.  You have to really go back to the day before you experienced the invention to imagine how obvious it really was. The other vendors thought a phone without a keyboard was Dead On Arrival. I guess that’s because it was “obvious.”

The original article continues:

This is quite disingenious, Apple asked Samsung to pay an unprecedented $30 per phone for their utterly silly patents. When Samsung refused to pay this fee (which would be a disproportionate chunk of their profits per phone) Apple sued. Reluctance did not enter into it.

I think the average consumer would tell you that the attraction of Samsung phones is largely due to their ability to imitate Apple’s phones. Not that they’re inspired by them – but that they are shades of grey to Apple’s color.  And $30 for the “Apple” experience on your phone is well worth it – after all, Samsung built a nearly $8B business on the back of infringing IP.  The $30 per phone would have cost them $500M instead of $1B.  Either way, I’m guessing Samsung execs feel like it was a bargain (pending any further damage assessments).  They vaulted themselves into the top echelon of smartphone manufacturers from virtually nowhere.  How were Apple’s patentsnot worth $30?

I know there are folks who think the patent system is broken – big VC’s are among them (and have a reason to dislike the patent system, due to the ability of large companies and patent trolls to sue their startups).  But whether the system is broken or not, the law was on the books and so were the patents when Samsung decided to infringe.  And Apple offered them an out.  Apple was entitled to pursue the protections the law provides.

Lest you think this is stifling innovation, no one is arguing that Samsung phones are more innovative than Apple phones.  Or that Samsung’s mobility division has ever innovated in any respect.  Samsung has a great history of innovation in other parts of their business – televisions, display technology, chips, etc. But this action by their mobility division undermines their credibility and reputation as a company.  Did their “innovations” in other areas come by copying as well?  Is that all the brand stands for? A cheap knock-off of someone else’s hard work?

This most definitely is not Nest vs. Honeywell, where Nest has produced something truly innovative and Honeywell is trying to construe their ridiculous patent portfolio to apply to something that is, finally, different in the thermostat space.

Apple is the innovator, and Samsung the copier.  No one is confused about that.  And no one complained when Apple forked over $600M to Nokia, along with some patent exchanges.  No one called Nokia the names Apple is now being hit with.  In fact, Jacques Mattheij brags that he uses a Nokia dumbphone.  $600 Million, sir.  Rather than an “Apple Tax“, I see it as Apple forcing these competitors to actually innovate rather than copy.  Be inspired, rather than be a drone.

Lest you think it can’t be done, look no further than another licensee of Apple patents: Microsoft and their Win Phone 7 and 8… Its a much more interesting market alternative than Android, and offers real differentiation in interface and design. (I have to give Apple credit for having them sign a no-cloning close)

Back to the patent system – I agree with critics that software patents last too long. Technology patents in general last too long.  And there’s good question as to whether “software-only” patents should be allowed. But the better arguments are not around Apple right now but around the big firms that are seeking to block new innovative products, rather than the firms trying to block me-too products, and around the patent trolls that just tax everything and never offer products to improve our lives. Arguing using the wrong examples hurts the cause of reforming the patent system, in my opinion.

I suspect we’ll see a new round of innovation in the mobile space – thanks to the patent system and the courts.  Samsung and other Android device manufactures will need to come up with something new and different.  In the long run, that may be better for the companies involved, and the consumer, than throwing the patents out and letting everyone copy everything. We’ll find out.

Update: Marco Arment has a thoughtful post on the subject that I missed before I posted, and I find myself agreeing with his perspective:

I disagree that “useful” phones need to be so close to the iPhone that they run into Apple’s patents and trade-dress claims in the Samsung case.

I also don’t buy the “we’ll have to pass the costs along” argument. Businesses always say that to scare people, usually government regulators via their voters, into maintaining the status quo and avoiding additional regulatory, safety, or environmental costs that are usually better for consumers.

Right. Prices get set by the market, not by the suppliers.  Perhaps they’ll just make less profit (as is often the case).  And maybe the whole world won’t fall apart after all?

Google has already sidestepped most of Apple’s interface-behavior patents with the newest versions of Android, which might eventually be used by more than a handful of customers. And Android is much more of an iPhone-ripoff “iOS-inspired platform” than Windows 8, which has avoided almost all relevant Apple patents.

What’s really going to disrupt the iPhone is going to be something completely different, not something that tries so hard to clone the iPhone that it hits Apple’s patents.

[…]

I fail to see how consumers lose.

Amen to that.

 




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