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IT: Clash of the Tech Titans
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altTen years ago it seemed that hardly anyone used Apple Inc. products. Their computers were known to be incompatible with most software and having a strange but unique design. Fast forward to today and you can’t walk into a Starbucks without seeing a person sipping on coffee whilst using their Macbook or chatting to a friend on their iPhone. Today, Apple is the largest publicly traded company in the world. Apple is also the largest tech company in the world in terms of both revenue and profit, more than Google and Microsoft combined. Their iPhone division alone was more profitable than the whole of Microsoft! That's right, Apple made more in 2011 just on iPhones than Microsoft made on all of its computer hardware, software and Xbox division put together. At the same time, Samsung is also a giant player in the tech industry which is quickly becoming one of the most popular phone makers on the market. The Samsung Galaxy Series is very impressive and has been quickly eating up Apple's market share. 
 
In what has been hailed as the ‘patent trial of the century’, Apple has put on its boxing gloves and decided to take on Samsung, and, in the future, potentially every Android handset maker, for various patent violations. Before Steve Jobs passed away, he had said “I am going to destroy Android, because it's a stolen product. I’m willing to go to thermonuclear war on this.”  If he were alive today, surely he would see the USD 1 billion courtroom victory in August as the first blow in what is surely to be an epic battle between these tech giants. 
 
Apple brought three utility patents and four design patents against Samsung to the courts. The utility patents are in regards to the bounce back that occurs when you scroll beyond the edge of a webpage or document in iOS, another was for one finger scrolling and two finger zooming; whilst the last utility patent was for tap-to-zoom technology. The design patents involved the iPhone's edge-to-edge glass and display border, rounded corners and home button, and the grid-style icon layout of iOS. The jury found that Apple's patents were all valid and that Samsung was in violation of all of these patents, to varying degrees, with 21 different Samsung devices. Samsung has designed a custom version of Android for its phones that is more similar to iOS than regular stock Android- which is a key factor in why Apple has gone after Samsung as opposed to another smart phone maker. 
 
Apple also won a ‘trade dress’ claim. A trade dress is a means of protecting a business’s image and appearance and how that image is perceived by the public. For example, the design of the Coca-Cola bottle is distinctive and when people see it, they will immediately associate it with Coca-Cola. The jury in this case had to decide if Apple's iPhone and iPad design were famous enough to have been diluted by Samsung's similar design. 
 
On the other hand, Samsung pointed the finger at Apple and said that they infringed 5 of their own patents. However, while the patents were valid, the court ruled that Apple had not actually infringed any of those patents. In the end, Samsung was ordered to pay USD 1,049,393,540, the highest amount ever recorded for copyright infringement. 
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However, this could be just the tip of the iceberg. The global mobile phone industry is estimated by Credit Suisse to reach over USD 207.6 billion dollars this year. During Q2, Android was the OS for 68% of the worldwide shipment of smart phones compared to Apple's iOS which powered 17% of Q2 smart phones. Samsung is at the centre of fuelling Android's rapid growth as they accounted for 44% of all Android smart phones shipped last quarter. The court's decision could definitely stifle Samsung's growth, especially since Samsung will need to make some changes to its design. 
 
The Apple and Samsung patent battle will be waged around the world as a kind of strategic chess match being played out within the court room. In Japan, Apple had sued Samsung for patent infringement having to do with syncing music and video data with a computer. However, in this battle, Samsung was victorious. But that's not all, there are still several other ongoing cases being played out in Japan, including one pertaining to the bounce-back patent. 
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Apple also has more patents which it plans to dispute in the US court. Apple will challenge Samsung over the ’slide to unlock’ feature and universal search function. 
 
Future Implications
While Samsung is feeling the pain right now, USD 1 billion will not cripple them by any means. In the last quarter alone, Samsung made USD 4.5 billion in profit. Two thirds of that profit came directly from its mobile business. It is true that Samsung's stock dropped significantly after news of the verdict, but the share price has already begun to recover. 
 
Apple is looking to continue their offense by asking for a number of Samsung devices to be banned in the US market. On 20 September, Apple and Samsung went back to court in order to discuss whether or not to ban the Samsung phones which have infringed Apple's patents. The phones in question are the Galaxy S 4G, Galaxy SII, Galaxy S Showcase, Droid Charge and the Galaxy Prevail. 
 
Samsung has time to alter its newest products before they reach the US market so that their phones are not in violation of Apple's patents. The utility functions can be easily and instantly changed  since the release of a new software update. For example, with a new software update, the grid-style icon layout can be slightly altered into another array so that it no longer infringes Apple's patents.  However, changing hardware and design is another story. This will take a much longer time to design, approve, produce and ship out. The time frame is anywhere from 18 to 36 months. 
 
In the future, Samsung will have to alter their products in order to differentiate themselves more from Apple's designs. This could potentially lead to new innovative designs from Samsung or a costly misstep. In either scenario, Apple is sure to stifle Samsung's growth and seize the opportunity by taking back market share with the new iPhone.
  

By Justin Toy 
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