Kirk Klasson

Nothin’ Like a Little Home Cookin’…

High stakes, low yields and endless pyrrhic victories…

Well, the verdict is in, at least this week’s verdict is in, as Apple got a jury in their own back yard to endorse their claim that rounded rectangles actually does amount to Intellectual Property.

Interesting, since many displays have employed rounded rectangles for years. The next time you walk around an urban center have a look at all the signage that adorns retail storefronts. Most of it, in fact, nearly all of it at one point, employed some form of rounded rectangles.  Why? Pretty simple really. Electric signage has used rounded rectangle enclosures to house fluorescent back-lighting of one form or another since before Apple was even conceived as a business; it amounts to little more than a common and even conventional display metaphor dictated by the size and shape of
fluorescent blubs.

Citgo Sign, Kenmore Square,
Boston. circa 1965, a perfect iPhone icon

You’d think Samsung might have mentioned that.

But as legal contests go this show is just beginning. Samsung will no doubt appeal and the release of the iPhone 5 may even bolster its case in some unexpected ways. Doesn’t it seem more than a little ironic that Apple is asking for a legally mandated monopoly for its device in the US market just when it brings to market an arguably uncompetitive product? As far as consumers are concerned, by removing Google maps and replacing it with what appears to be Apple’s own map knock-off, the value of the iPhone 5 has been seriously compromised. But consumers may not have a choice if the current verdict is allowed to stand.

Meanwhile, in markets and courtrooms far, far away, events may render this drama moot. A week after the US verdict a Japanese court rejected Apple claims of infringement. And similar cases are pending in other jurisdictions where the whole notion of design as intellectual property has absolutely no basis in law or culture. It seems that home cooking means different things in different places. So, location may ultimately determine the real value of the meal.

Nielsen recently released a report on the status of the US smart phone market where it reported that 55% of mobile subscribers currently own a smart phone. This is significant in that at this point the market for these devices has already approached saturation and is boarding on replacement only. More telling was the statistic that 74% of subscribers aged 25 to 34 already own smartphones. These buyers constitute the sweet spot of the smartphone market and they are well into a replacement only situation. So Apple seeks to monopolize a market that has essentially run its course.

So what smart phone markets remain contestable and what is the predisposition of those markets to honor Apples claims of design based intellectual property? Well, conveniently, IDC recently released a report that suggests that the dominant contestable market for these devices, no surprise here, is, and for the foreseeable future will be, China which is projected to make up 26.5 percent of 2012 smart phones shipments compared to only 17.8 percent in the US.

Source : IDC, August 2012

And what do you suppose the dominant operating system of devices purchased in China will be? Right again, Android. Numerous posts here (The Ghost in the Machine – November 2011 and Requiem for a Business Model– February 2011) have outlined precisely why open source and more particularly Android would come to dominate the smartphone and tablet industry. What’s left to be seen is how much weight Chinese courts will lend to Apple’s intellectual property claims; historically, this has amounted to little or none. And the reason for this is obvious since Android is the OS employed by indigenous device suppliers. That’s home cooking for you.

So, for the moment, the legal battle between Apple and Samsung will rage on while the economic justification and motivation to pursue it remains more and more in doubt. The calculus that suggests that monopolizing a saturated domestic market through legal means will somehow influence worldwide leadership in a global market seems suspect at best; at worst, it is little more than squandering precious time and resources that might be devoted to genuine innovation.

And while Apple’s legal battle to some might appear to be a righteous and courageous, even noble, fight, discretion remains the better part of valor and in the end customer share not legal outcomes will determine who’s the victor.

Might be time for both parties to set aside their differences and let the consumer determine who can claim the field.

Graphic courtesy of Susan’s Home Cooking.

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