Patent trial victory is the beginning of the end for Apple

by James Laird
, 04 Sep 2012
Patent trial victory is the beginning of the end for Apple

Was there ever any doubt as to the outcome?

As the champagne corks flew not long ago at Apple's headquarters in Cupertino, California, the international observer could be forgiven for feeling a bit stupid. When the historic patent trial against Samsung commenced, many of us were content to play down the iPhone manufacturer's home court advantage. It wouldn't be a non-factor, of course, but we were naïve enough to think that the venerated US legal system would ultimately prove us sceptical European types wrong by delivering a relatively fair and balanced verdict.

In the end, Apple's victory was so resounding that it seems foolhardy to have ever regarded the case as anything other than a full-scale conspiracy against Samsung, the evil foreign invader. Situated in the heart of Silicon Valley, San Jose isn't just Apple's home ground, it's practically its back yard, a mere 15 minute drive from courthouse to Tim Cook's office. Both directly and indirectly, the company is a major employer in the area. More than that, it's an icon of US industry, and one with a Rocky-style back story to boot: the nerdy niche start-up that took it on the chin a few times but ultimately rose to become one of the most influential and popular brands in the world.

From a purely legal perspective as well, the trial seemed inherently biased from the start. Even before the first accusations had been exchanged, presiding Judge Lucy Koh – now a bit of a legal celebrity and a good bet to get her own reality TV show in the future – sent out a clear message by granting Apple pre-trial sales bans on a number of Samsung Galaxy products. In other words, the jury's more hesitant members had a precedent to refer to when making their decision - the legal expert had already effectively gone on the record as being convinced by Apple's case. Samsung certainly didn't help itself by cozying up to the press, or skulking around the courtroom after hours, but realistically, Tim Cook could have bust out the bubbly over a month ago.

In fairness, Samsung's legal team must have known that they weren't going to get off scot-free. But the Korean firm, like many of us, probably envisaged a more balanced endgame: it would come good on a couple of its claims to help offset Apple's inevitable victories. Both sides would emerge tainted in some way and, while sizeable chunks of money would change hands, the pursuit of sales bans would likely fall by the wayside.

Yet it turned out to be exactly the kind of thumping victory that Apple wanted, a triumph so lopsided that the Cupertino-based firm can now look to have Samsung products jettisoned from shelves willy-nilly and target even more Samsung products as, indeed, it is now doing with the Galaxy S3 and Galaxy Note devices. The irony of the ruling is particularly acute given the Californian setting: in a few weeks, you'll be able to buy half an ounce of premium grade cannabis at a drive-thru, but could face the long arm of the law for trying to get your hands on a Tab 10.1. It's one of those classic, only-in-America situations.

In retrospect, it just sounds laughable: "San Jose jury decides in favour of Apple" could almost be a headline from The Onion.

Decline of an empire?

But there is another way to look at it, a perspective that makes for far less giddy toilet reading for Apple fanboys. The fact is, while the US remains a key market for the time being, it is set to become increasingly marginalised in the next 10-20 years. The BRIC countries, especially China, are where future growth lies, and these markets require new strategies. Being native to Asia, a firm like Samsung is likely to have a better understanding of these markets – not to mention the legal systems that help regulate them. A case in point is the recent ruling in Tokyo, where a Japanese panel of judges rubbished Apple's zealous patent claims.

There will always be the wide-eyed kids who hawk their innards for an iPhone, of course, but as China's middle class continues to expand and conditions in the country itself further improve, Western products will cease enjoying automatic status symbol positioning and Apple won't be able to shift units just by virtue of its name. China's fierce nationalistic streak could find a new expression in patriotic consumption – think the kind of economic nationalism ironically trumpeted largely by the US, and dating as far back as 1933's Buy American Act. Chinese and Taiwanese firms like ZTE, HTC, Lenovo, and Huawei will benefit most obviously from the shift in shopping ideology – provided that they can deliver the kind of high-end products China's new money wants to buy. Samsung, of course, already delivers these kinds of products.

There's no question that Apple's patent victory is huge, but San Jose is very much a present-day battleground. As "crack China" becomes the new "break America," Apple will need to demonstrate all the ingenuity it is known for to stay competitive. And if it keeps going down the road of legal entanglement, it may get a few nasty surprises when it is recast as the nasty alien interloper. Apple may have cemented its position as king of the playground for the time being, but the swings will go rusty if it doesn't find more positive ways to engage with the market.

Apple-free alternatives

Ultimately, this is the core issue. Apple's present strategy of legal aggression – its bully boy tactics, some might say – just don't sit well with a lot of people, and it's not just fandroids who take issue the Cupertino corporate ethos. Personally, I love Apple products but can't stand the way the company does business. The Apple versus Samsung trial has made this gut-reaction more difficult to ignore, and I doubt I'm the only one experiencing an increasingly queasy feeling about the product in my pocket.

Taking devices made by Samsung and other competitors off of shelves isn't going to make me more likely to buy another iPhone as my primary handset. The product is, generally speaking, strong enough to speak for itself in this regard. If anything, the attempt to force consumers to feel they have to stick with Apple devices or take a step back functionality-wise makes me more determined than ever to find myself a legitimate alternative to the iPhone. Once, I could have been relied upon to be heading the overnight queue outside the Covent Garden Apple Store in a few weeks' time, perfectly happy to spend half a month's wages to get an iPhone 5. OK, maybe that's a bit of an exaggeration, but I would have almost certainly had one by Christmas. Now, my enthusiasm for the new product is distinctly dimmed, not because it doesn't excite me, but because I seriously object to the corporate practices of the manufacturer.

Likewise, I'm in the market for a new tablet ahead of a trip to Taiwan in October. My Samsung Series 7 slate seems just a little bit too clunky to drag half-way around the world, and the new iPad is, more or less unanimously, the best device currently on the market. I would have happily adopted an iPad because it's a better product, not because my local PC World wasn't allowed to sell other decent tablets. Now, I'll be doing my homework and trying to find a feasible alternative. Maybe a 7in display is large enough to satisfy my media needs on a 14 hour flight after all, and the Nexus 7 seems a pretty awesome device by all accounts. Or perhaps I'll take my Series 7 on a farewell tour and then wait it out for the Microsoft Surface.

Strange days

Consumers exhibit some extraordinarily strange behaviour at times. People in Europe still willingly use BlackBerry devices, for instance, and many in the UK seem to hang onto their feature phones like being able to survive on outdated technology earns them a medal of honour. One aspect of high street buying that is fairly consistent, however, is that people don't buy things they don't like. And frankly, however hot the new iPhone turns out to be, Apple just isn't very likeable at the moment.

It's highly unfashionable to buy clothes thought to be produced in sweatshops. People don't dine at restaurants that have a reputation for stealing the waiting staff's tips, or sourcing unsustainable produce. Eventually, the light will go off in the consumer electronics world and people will, metaphorically speaking, simply stop going to eat at La Maison d'Apple. If it starts to wind down the strong-arm routine now, it may well be a case of looking back and saying: fair enough, you thought that a few of your rivals borrowed unfairly from your designs, and you took them to town for it. However, if it acts even more bullishly in and around the world's courtrooms now it has notched its first blockbuster victory, then the anti-Apple movement will continue to build. 

That's not to say that no one is going to buy the iPhone 5 - we're talking about the most valuable company in the world and, love or hate it, Apple knows how to sell a product. The predicted frenzy will come to pass, just like McDonald's will be full on Friday night and new Nike trainers will be a prestige item in the playground when schools resume shortly. But Apple is taking a risk in the long-term by becoming as known for its draconian business practices as it is for its impressive product offerings – a risk that, given the quality of the products, it doesn't need to take. In 2030, we might be looking back on Apple's epic patent win as the beginning of the end – the moment the battle of units shipped became a war for consumer hearts and minds.

blog comments powered by Disqus