Judge Judy would be proud of the drama currently engulfing the courtroom where Apple and Samsung’s lawyers have begun sledging it out. Already, previously secret documents have been exposed to the press, jury members have been excluded and the judge has demanded to know who from Samsung’s legal team released documents to the press that she had ruled inadmissible to the court.
Tensions are clearly pretty high, as are the stakes. Securing a legal victory over their rival would allow either company to restrict the sales of infringing hardware by the other company, guarantee them exclusivity over patented technology, or at the very least gain royalties from the ensuing licensing deal.
It’s pretty obvious who is going to win the current patent war between Apple and Samsung, and it isn’t the consumers. As much as they can both afford the extortionate legal costs and undoubtedly ludicrous fines that will probably emerge from this four week process, it serves as a distraction from their core interests.
It’s bad news for customers because any legal costs and fines incurred harm firms’ profitability – their only way to increase profitability in an increasingly saturated market is to increase the price of the phones or cut the costs of production.
They often try both, as they’re driven by the profit motive, meaning that consumers tend to end up paying more money for substandard goods. Oh, sure the features we see on the phones will get better and better, but they’re just the flashy headlines – build quality, durability and longevity suffer instead. In a worst case scenario, products will be withdrawn from the market and innovative technologies will be restricted exclusively to one firm or the other.
That is exactly the kind of result that each legal team is hoping for, but it is a nightmare for the progress of the industry, the consumers and ultimately the manufacturers themselves. It does them no long term good to be tied into complex legal and financial entanglements regarding licensing and availability of technology.
Watch your backs!
Behind the scenes ZTE has been creeping up relatively unnoticed on the two smartphone giants with its own range of more than competent smartphones. It came as a surprise to some today when they announced that they had replaced RIM (makers of BlackBerry) as the fifth most popular smartphone manufacturer in the world. ZTE shipped a whopping 8m handsets in the second quarter of 2012 which was an incredible 300% rise year-on-year. More impressively they are now only 0.5% behind HTC in fourth and 1.4% behind Nokia for overall smartphone market share. Both of these two companies are on the way down, with falling profits and declining market share.
This current patent war gives them a great launch platform for an assault on the top three. Stagnation is the most likely outcome for both Apple and Samsung, and at the very least it acts a financial sink for money that might otherwise have been spent on research and development. Unbound by this ZTE are free to invest, research and implement new, innovative technologies. Nokia and HTC are in no position to take risks, and have very little cash with which to do so.
Therefore, the stage is set for ZTE to swoop in and gobble up the other firms’ profits and market share as long as they can provide great phones at affordable prices. They might not have the brand loyalty built up in Europe and the USA yet, but that is something they can only hope to improve upon with newer and better technology than the other four contenders in the market.
Ollie Sheerin writes about tech, gadgets and the mobile phone industry. When I’m not doing this I run SEO over at Store O2.