Wholesome Marketing Ideas, Bite Size

Wholesome marketing ideas, bite size

Sunday, August 26, 2012

Apple vs Samsung, rulings by courts and consumers

The latest round of the Apple Samsung battle goes to Apple, with a jury in California awarding over $1billion to Apple that Samsung must pay for violation of patents. This week, the judge could triple the amount and rule to block the sale of Samsung products in the U.S.

This is, of course, a blow to Samsung, and just as big a blow to Android (made by Google) which is the operating system that currently powers most of the world’s smartphones. 

The smartphone market is a $220 billion market, growing at almost 40% per year. The stakes are very large.

In addition revenue and profits, the winner in the smartphone battle gets to define customer preferences, access to apps, the terms on which the ecosystem of developers and ancilliary hardware manufacturers relies, the nature of relationships of handset makers with carriers, and the future direction of the industry.

Have Google’s recent 68% worldwide market share and incredible growth just been hit by the California ruling?
The message of the ruling to all players in the market is clear: be different.

The immediate implications of the California ruling may be to suddenly increase the value of the Microsoft/Nokia partnership, or at least of Microsoft’s phone operating system. Does it also revive the flagging fortunes of Research in Motion, the maker of Blackberry? Does it increase the value of the patents held by players like RIM? Will RIM finally be able to find a suitor thanks to the ruling?

Several other patent infringement cases are pitting Apple and Samsung in pitched battle in several other countries. The outcomes are being closely watched.

Court verdicts in the U.S. and elsewhere are important to the future the industry. But we should not forget that Samsung and Android remain the dominant forces in the largest smartphone market in the world – China, which accounts for 27% of the world’s smartphone shipments. Apple lags in fifth place there. Android has 81% of the Chinese market – local handset makers love that it is a free operating system.

Back in the 1990s, Intel, tired of the lawsuits that had it fighting for its rights to the technology and names (the x86 nomenclature, for those who remember that far), eventually took the battle to the marketplace: the intel inside campaign established its market supremacy like no court win could.

A decade from now, will look back and say that the patent rulings shaped the handset industry, or will we say that it was dominance in China that determined the ultimate fate of the players?

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