Apple has had a big few weeks; launch of the iPhone 5 (leading to record sales); launch of iOS 6 (leading to record public meltdown over those much derided maps); a falling share price and a riot in a Chinese factory followed by strike action. Just a regular few weeks for the world’s most valuable brand!
Let’s not get wrapped up in all these recent events though and instead let’s turn our attention to the distant past, or rather 24th August this year (this may not seem that long ago but in Apple years it’s a lifetime. To put this into perspective, this time last year Apple were apparently clocking up an average of $1670 in profit every second so the 4,233,600 seconds (or 49 days) between now and 24th August is worth $7,070,112,000 assuming Q4 2012 is as good as Q4 2011. And we haven’t even accounted for the record sales of the iPhone 5. But anyway, I digress!) On the 24th August this year, Apple was awarded $1bn in damages by the US courts, to be paid by Samsung for infringing intellectual property rights on several of their devices. Apple is now seeking injunctions to make the sales of the affected Samsung devices illegal in the US.
The numbers are big, the potential impact on intellectual property claims is massive and it must surely sting for Samsung but let’s drag our attention away from the corporate behemoths and instead look at what it means for the everyman - the consumer.
- The court’s decision has sent a very clear message out to manufacturers that products need to be different, so in the long term, the decision may have done us a favour. Rather than simply copying the same old features under another logo, firms will now be forced to innovate and challenge the dominance of Apple’s design, ultimately leading to more consumer choice.
- As competitors up the ante, so will Apple need to respond if they want to retain their position in the hearts and minds of the world’s smartphone and tablet users. Apple may have come out on top this time, but $1bn could be small change if Samsung or other competitors redefine the landscape as a result of their forced return to innovation.
- The legal precedent this sets doesn’t just apply to Apple and Samsung but could apply across a variety of products, industries and manufacturers. The introduction of the massive pay-out may be the dawn of a new innovation era, where designers push themselves further than ever in the quest of excellence (and avoidance of fines!)
- In the short term, Apple’s design dominance looks here to stay. The result means they will arguably be more confident to take legal action in the future, leaving competitors facing this risk, forced to allocate financial contingency and being in that unenviable position of needing good, new ideas, fast. Paying Apple license fees will only eat further into the R&D budget and potentially lead to short term design stagnation.
- Is it a coincidence that Apple’s legal victory has come at a time when they have faced public outcry about their latest offering? Have they become distracted from their bread and butter of product and customer experience by the flashy temptations of legal victory? Or is this a deliberate move as they know their own ideas have lost the cutting edge appeal so they have sought refuge in the courts? Whatever the answer, an Apple focussed on law-suits is not focussed on the consumer and we can only lose from this.
- Finally, if Apple’s competitors cannot rally, or take too long to do so, this may lead to a monopoly situation for Apple which spells only one thing for consumers – price hikes!
In conclusion, I think it is too early to accurately evaluate the impact of the court result on consumers as much of this evaluation depends on the response of Samsung and other competitors. Samsung are due to appeal the decision which will tie up a good few months in legal wrangling and I sincerely hope that they, and others, use this time to generate new ideas. In the long term, the decision could be good for consumers but much of this depends on how long is long and as an advocate of consumer interests, I for one hope ‘long’ turns out to be relatively short.