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Apple’s Patent Win Could Alter Landscape Of Smartphone Industry

Filed by KOSU News in Business.
August 25, 2012

The dust has yet to settle on Apple’s patent lawsuit victory over electronics giant Samsung on Friday. Samsung, who must pay over $1 billion in damages to Apple, has said that it will ask the court to overturn the verdict, but if that proves unsuccessful, will likely appeal to a higher court.

“This decision should not be allowed to stand because it would discourage innovation and limit the rights of consumers to make choices for themselves,” Samsung lead lawyer John Quinn told the Associated Press.

Whether that’s true or not, the verdict sends a message through the smartphone industry that other manufacturers will need to re-think their designs to be less Apple-like, or risk legal repercussions.

Robert W. Dickerson Jr., a lawyer who is the head of the West Coast intellectual property practice for Dickstein Shapiro, a patent law firm not involved in the Samsung-Apple case, told the New York Times that:

“Companies in the future are going to have to consider how much they want their product to look and feel like their competitors’ products in terms of shape, size, the way it feels, the way it looks, how the icons are similar, or will the icons be quite dissimilar.”

Additional fallout from the case could be what the Wall Street Journal calls, the Apple tax. Competing device makers would have to license the technologies Apple sought to protect in the suit, which would add to the manufacturing cost of those products.

That additional cost could eventually find its way to consumers.

“During the trial, Apple executives testified that the company was willing to license some of its patents to Samsung. In October 2010, Apple offered to license its portfolio of patents to Samsung provided the Korean company was willing to pay about $30 per smartphone and $40 per tablet.

The verdict doesn’t necessarily mean that consumers will end up shelling out more for devices from Samsung or other makers of Android devices that use similar Apple technologies. The potential extra cost could be swallowed in part by manufacturers or wireless carriers. However, [IDC analyst Al Hilwa] said that ‘in the end I think the consumer will pay more.’”

Though not involved in the lawsuit, Google, maker of the popular Android operating system that powers many smartphones in the marketplace including Samsung’s, was also a target. If other makers of cellphones fear lawsuits from Apple, they could shy away from choosing Android to power their phones.

“It has got to create some concern for that ecosystem,” Baird analyst William Power said. “The legal risks are bound to make a manufacturer think twice.”

Aside from Apple of course, another big winner in the case could turn out to be Microsoft, according to Mashable’s Peter Pachal. Microsoft’s Windows Phone, produced by partner Nokia, has a distinctly different look and feel than the iPhone and this might be their opportunity to gain some market share.

“Windows Phone is extremely attractive, particularly now. With the launch of Windows 8, Microsoft will unite its desktop/tablet and phone operating systems with shared code. That means it’s going to be incredible easy for developers to make apps that work across all Windows machines. Windows Phone also has a clear hardware leader in Nokia, so other manufacturers will never have to worry about being the only one carrying the torch.

On top of that, the OS is actually good. Windows Phones are generally well reviewed by both influencers and consumers. Criticisms generally focus on the lack of support for better hardware, but Windows Phone 8 will change that. True, its app catalog is nowhere near as robust as iOS’s or Android’s, but that gap could close quickly with the boost it gets from Windows 8 developers.”

Nokia, having been in the cellphone business for a time, also has its own portfolio of patents to protect itself.

A followup preliminary hearing on injunctions based on the verdict is scheduled for September 20. Considering that some of Samsung’s phones that were found to infringe on Apple’s patents are currently on sale, the potential for sale bans is not out of the realm of possibilities. [Copyright 2012 National Public Radio]

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