I can't wait for Apple Inc. (Nasdaq: AAPL) and Samsung Electronics Co. Ltd. (Korea: SEC) to wrap up their courtroom fight. The war has been nasty, the evidence so far presented less than compelling, and the wounds inflicted barely worth a trip to the ER. If these companies would only look outside the courtroom they might realize consumers hardly care about their petty squabbling, while rivals must be thrilled their executives have been spending more time in a courtroom than in design rooms. Who's really winning here?
While the mainstream press and even many in the trade media provide blanket coverage of the lawsuit over how much Apple believes Samsung should pay for allegedly blatantly copying the rectangular shape of the US-company's iPhone and iPad, or some other design pattern, I have been itching for a return to productive competition by the two combatants.
The details of the lawsuit so far have been mind numbing. The story so far seems to amount to no more than the kind of jostling kids in a school yard might get into on a hot afternoon. I can just imagine a teacher trying to resolve the she-pinched-me-first-before-I-kicked-her quarrel. Apple and Samsung may not understand this, but that's how many in the consumer world view what is happening in that California courtroom.
Only the stakes are so high for the two companies. I am not referring here to any monetary compensation either party might get. No. They can both handle whatever the jury decides if it awards financial compensation for either party. In Apple's case, it can easily write a check from its more than $100 billion in cash and securities. Also Samsung, which along with its courtroom rival has pocketed most of the industry profits from wireless handset sales, has deep enough pockets to handle the $2.5 billion or so Apple is demanding if the case is decided in its favor.
But after the "he-said, she-said" that the two companies have spouted so far in the courtroom they will still both have to return to the market for the real duel for marketshare. Nothing dramatic has so far been revealed in court -- nothing, in any case, that would make consumers believe Samsung has been such a blatant violator of copyright or patent laws that they should shun the company's products. Apple may win the case on legal nuance, but it may lose in the court of public opinion where many are beginning to think the entire legal war is being waged to slow down a competitor rather than because Samsung has been egregious in copying Apple products. Of course, diehard Apple fans will disagree, and others will buy the company's products no matter what noxious fumes have been emitted in the courtroom.
I've believed from the beginning that it's the lawyers who will walk away as winners once the dust settles on the patent litigations that have mushroomed over the last couple of years, pitching most of the industry's leading manufacturers against each other. While there's a place for litigation, the evidence Apple has presented so far does not rise to that level, and whatever Samsung will be presenting over the next week as it makes its counter-argument will equally sway very few. Neither can claim ownership of many of the key technologies in wireless communication, and neither is going to win customer patronage by seeking to blunt a competitor's edge in this manner.
While writing this article, I thought again of Motorola Mobility Inc. (NYSE: MMI) and Nokia Corp. (NYSE: NOK) and the challenges facing these two companies. They were once leaders in this market, but their current positions tell us where winners are decided. Motorola Mobility is a wounded company; its new owner, Google. announced yesterday the company will be laying off 4,000 employees worldwide in an effort to be profitable. Nokia has announced similar large-scale job cuts.
Neither Apple nor Samsung were notable players in this market even 10 years ago when Motorola and Nokia ruled the wireless world. The two emerged from adjacent markets to dethrone the established players. So, here's my blunt message to the two companies: While you fight your silly courtroom wars and take your executives' attention away from the real battlefield, new rivals are plumbing holes in your market and eyeing the huge profits you hauled away last year.
They are on your blind side, and you may not even know who they are. They won't win this year or even in the near future, but the profit you are harvesting in wireless is too tempting, and you've opened up a crack for them to explore. Inflict dangerous wounds on each other. It will only help the unknown, maybe even the unborn, rivals.