Apple's win ushers in an era of nastiness in tech

The decision against Samsung is likely to reform the mobile landscape.

By TheStreet Staff Aug 27, 2012 11:14AM

By Richard Saintvilus


There's always been a fine line between "flattery" and theft. After all, it's broadly understood that imitation is the best form of flattery. While that may be great with best friends who may decide to buy the same dress, in the corporate world too much flattery keeps lawyers employed.


There's no better example of this today than what has been going on between tech giants Apple (AAPL) and its suit against South Korean giant Samsung.


Since recently becoming the world's No. 1 device manufacturer topping Nokia (NOK) in terms of sales, Samsung has earned more than its share of attention from Apple. Samsung, whose Galaxy devices are based on Google's (GOOG) Android platform, have proven to be the only true challenger to the iPhones and iPads.


Now we know why. Apple, which has long claimed that Samsung willfully copied its design, has been awarded $1 billion by a jury which found Samsung guilty of infringing on Apple's patents.


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The verdict only made official what everyone already presumed to be true. It is no secret that Samsung drew a considerable amount of inspiration from the original iPhone launched January 2007.


Prior to that, Samsung's models more closely resembled phones from Nokia and to some extent, Blackberry models from Research in Motion (RIMM) with no touch screen.


However, after Apple released its first iPhone, things changed for Samsung as its design suddenly got slicker with touch capabilities. These facts did not escape the verdict.


What's more, as substantial as the $1 billion penalty may be, there remains the possibility that it can triple by virtue of the fact that Samsung's actions were considered deliberate. Apple has essentially sent a clear message to the rest of the industry that it will not let its hard work in R&D and other capital investments be stolen by rivals with track records of inferior designs. In other words, it is time of rivals to start planting their own trees.


Impressively, with one single verdict, Apple is able to weaken two primary rivals in Samsung and Google, which licenses its Android operating system to the South Korean company's phones as well as tablets.


Similarly, there are also two winners. In addition to Apple, the other victor in this case can potentially be Microsoft (MSFT). Manufacturers will look for a way clear from legal concerns over designs. I think this opens the door for Microsoft and to some extent Nokia to recapture some market share from Samsung and Android. (Microsoft owns and publishes TechBiz, an MSN Money site.)


While I doubt that Apple cared about helping Microsoft, the question remains, what will Microsoft do with this opportunity? As a "non-Android" option, will it be able to put together a product that appeals to consumers? Clearly Apple has this figured out.


Samsung is now being punished for thinking that it was easier to copy Apple. Microsoft must discover on its own what the right mix will be to capitalize on this opportunity. But the window won't be open forever.


Samsung is certain to appeal this decision and will seek to delay as much of its payment owed to Apple as possible. Meanwhile, Google is realizing that its own attack against Apple by virtue of its patents acquired via its acquisition of Motorola (MMI) aren't carrying the same weight. This is after it was recently discovered that the company violated user privacy settings in Apple's Safari browser and forced to pay $22.5 million in fines.


Apple is taking no prisoners. The company is shrewd and seems to now operate with a chip on its shoulder. As much as it targeted Samsung in this trial, there is now evidence that Google is who it was after all along. It won. What will this mean for the Android ecosystem is anyone's guess. But it affirms that unlike any other sector, the competition that exists in technology has gotten brutal and downright nasty.


Not only is Apple now targeting every rival that has crossed it the wrong way, but the recent movement of the stock suggests that the company is determined to punch holes in every bear argument and continue as has the past three years.


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Aug 27, 2012 7:16PM

Just goes to show that with enough money, you can buy whatever you want, including a verdict.

I wouldn't own an Apple product if you gave it to me.  They are out to control the market by any means possible, same as AT&T did with land line service. That worked out well for the consumer.

Aug 28, 2012 10:13AM
What we have today is a continuation of yesterday....Still low volume and plenty of manipulators already doing their thing...Consumer confidence was low as usual, with this economy who can argue, but they were bringing the market down before cc came out...Once again we will have to try to minimize the damage apparently...We will see...More later.
Aug 28, 2012 8:44PM
Nothing against Android but for me, two (almost) complete ECO systems, Apple for home & personal usage & Microsoft for business is all I will be buying into.

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