Feature Article

August 27, 2012

Apple Wins, Samsung Loses - Should Samsung Really Turn to BlackBerry Now?

On August 9, 2012 we wrote that Samsung would have to hang its head in shame: As the evidence became more focused and available, it struck us that Samsung had clearly reached out and helped itself to quite a bit of Apple's "core" look and feel technology, as well as a few handy design accents.

After a mere 22 hours of deliberation the jury came back with a near unanimous verdict, finding that Samsung had in fact infringed substantially on Apple's patents, while at the same time concluding that Apple had not violated any Samsung patents (it is worth noting that this was a technical argument and a minor aside to the whole patent suit, and the jury smartly figured that out).

All that’s left now is to determine what the final cost to Samsung might be for its "copy early, get in the game, then innovate later" gambit we detailed in our previous piece. The jury itself returned the number $1.05 billion – far below what Apple had requested (although Apple had purposefully aimed high, of course) – and all that remains is to see what Judge Lucy Koh decides to do about punitive damages.

We need to keep in mind here that Samsung's lawyers flirted with disrespecting the court (and to some degree the judge) during the trial – this may come back to haunt Samsung here as Judge Koh can treble the total overall fine if she wants to. Can anyone really disagree that the entire Samsung legal approach wasn't reminiscent of the famous Wizard of Oz's  "pay no attention to the man behind the curtain" line?

Quite honestly, we hope the entire cost to Samsung won't be trebled – Samsung can certainly absorb a certain number of dollars – but if the ultimate fine becomes overly onerous, it will result in Samsung having to follow through on an appeal. We'd far prefer to see an environment created within which Samsung can negotiate a total settlement that adequately compensates Apple and that leaves Samsung free to move forward, but with a strong need to now have to truly innovate.

There are certainly many levels of courtroom theatrics to be played out still, but for Samsung itself, less will be a lot more.

Samsung and RIM?

That leaves us once again pondering the notion of whether or not Samsung should take a very hard look at Research in Motion (RIM) and BlackBerry 10 (and beyond). We've already outlined a large number of reasons why a Samsung and RIM marriage would make a great deal of sense – Samsung's trial loss makes it even more compelling. Why?

Part of the problem relative to Samsung innovation is that Samsung must rely entirely on Android to execute. So far Apple has avoided taking on Google/Android in a head to head fight (which is the smart thing to do), and we hope it stays that way. But Google certainly has to heed the implicit warning the jury has delivered on the entire look and feel issue of the software. Our guess is that Apple is going to wait and see where Google heads over the next several major releases of Android before it chooses to act (or to not act).

Samsung, meanwhile, for all the reasons we mentioned in our other article, could do some rather powerful things with BlackBerry 10, and given its still powerful consumer position, could execute strongly in both the consumer and enterprise space; the enterprise space is the real potential "killer app" capability lurking behind a possible Samsung-RIM merger or deep partnership. Samsung would be foolish to spend its time trying to appeal last week's jury verdict (it won't win on appeal) rather than look to invest its resources in truly innovating. BlackBerry 10 and RIM are made to order for this.

Let's also make sure to not forget as well that BB10 will run Android apps.

Global Smartphone Innovation - Huge Opportunities to be Had

A number of mobile and tech industry pundits are currently lamenting that Apple's substantial patent victory may result in a non-trivial loss in the overall pace of smartphone (and tablet) innovation - where the real losers end up being consumers - less innovation, higher smartphone costs, and the usual FUD are being tossed about. We don't see any such thing happening.

First, Apple's victory is also a victory for Microsoft-Nokia - let's face it, the entire argument Nokia made for partnering on Windows Phone 7/8 was its belief that there is no clear way to innovate and differentiate on Android. Well, Microsoft and Nokia have been handed both a technical and marketing gift here of substantial proportion. Next week Nokia is scheduled to announce its Windows Phone 8 devices - let's hope that Nokia and Microsoft end up at the top of their games here - if Nokia (with Microsoft's substantial help) can score a clear marketing win along the lines Microsoft has pulled off with its Surface tablets, the 2012 holiday buying season is going to be of significant interest.

Next, though a Samsung-RIM partnership would not deliver for the 2012 holiday season, Samsung would certainly be in a powerful position to make a lot of noise during at Mobile World Congress 2013. This is the strategy we believe Samsung needs to pursue - partner with RIM, provide the necessary resources to scale up the scope of RIM's capabilities and set a pace for Mobile World Congress debut of something new and powerful that also crosses the enterprise-consumer boundary. BB10 also brings with it some clearly original UI capabilities - an awesome opportunity for Samsung to truly innovate.

Third, Google absolutely needs to heed that implicit warning from the patent trial and move to offer its own real innovations that part ways from iOS in clearly defined ways. The ball is in Google's court - and with Motorola in hand it also needs to show some new hardware chops. A "concept" Android/Motorola smartphone needs to demonstrate innovation sooner than later.

Finally, Apple itself needs to take iOS to an entirely new level. iOS 6 has over 200 "new" features in it, but at the same time every one of those new features rests on the core iOS foundation. That is, there is nothing inherently new in iOS 6 - rather there are lots of greatly improved features and logical add-ons, some of which simply rely on the availability of better hardware rather than software innovation. Where will Apple go next? Where must Apple go next? Let us know what you think!

In the meantime there are four major mobile platforms listed above - if that doesn't suggest that there is a great deal of innovation to be had, what would? Rather than lamenting a possible loss of innovation, we are looking forward to entirely new levels of innovation.

It is absolutely incumbent on Samsung, Microsoft, Nokia, Google, Motorola and RIM (and the rest of the device manufacturers) to deliver true innovation that leaves Apple with some head scratching to do. No one has done it yet, but the stage is now truly set for these companies to do so. Put up or shut up.

Want to learn more about patents in the telecom industry? Then be sure to attend Synopsis Under IP/Patents Telecom Sourcing Conference (SUITS), collocated with ITEXPO West 2012 taking place Oct. 2-5, in Austin, TX. Stay in touch with everything happening at SUITS. Follow us on Twitter.

Edited by Braden Becker

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