Daily: The Apple-Samsung verdict doesn’t alter the macro picture in mobile

I am a macro guy and so I usually discount the importance of single events when thinking about the bigger picture. That said, this is a momentous decision and a stunning defeat for Samsung. And it should be clear that Samsung was copying Apple. They are even copying their retail stores now as well. Nonetheless, I don’t think this decision to award Apple $1 billion and uphold its “look and feel” patents changes the overall context in the mobile space.

First, let’s remember that similar cases elsewhere, from South Korea, to Germany, the UK, Australia, and even the US have had mixed results. So while the case in Apple’s home turf was a clear victory, I don’t believe that Apple will have similar success elsewhere. When a similar Apple case against Motorola Mobility came before Richard Posner threw the whole thing out

Second, the macro picture is one of a single mobile competitor with a closed platform trying to operate effectively against a bevy of others, almost all of whom are using another operating platform. This picture is one that is unfavorable for Apple over the long-term. The quote from the fourth article down gets to the heart of this, Android manufacturers increasingly dominate the mobile market and this will not change anytime soon.

Third, the look and feel of Samsung phones is changing drastically. Samsung phones no longer look like Apple phones. The flagship Samsung mobile, the Galaxy S3, is very different from an iPhone. It is Samsung who is leading the industry right now by moving the mobile phone form factor to much bigger phones like the 5.3inch Galaxy Note, while the iPhone lags behind. To be sure, Samsung will have to develop around these patent issues like the bounce back patent or the pinch to zoom patent but this will not be a huge problem. Note that the appeals process still looms so it’s far from clear if this verdict will stand.

Nevertheless, this will cause some hurdles as Android manufacturers adjust to a new reality. Moreover, there will probably be a cost of future litigation, licensing deals or efforts to circumvent the patents that gets passed onto customers in the form of higher prices. This will diminish Android’s price advantage somewhat. But I don’t think it will be a significant hurdle over the long term.

Bottom line: this is a significant victory for Apple in its patent war. In the short-term there will be some pain for Android. But the pain will not be a big problem. Over the long-term, Android manufacturers will adapt and continue to take share pressuring Apple’s rate of growth and margins. 

Samsung Opens New Apple Store in Australia – John Paczkowski – News – AllThingsD

“Samsung this week opened its first retail “Experience” store in Sydney, Australia and its design and ethos, even in the most generous light, bear an uncanny resemblance to those of the Apple Store (photos here). ”   

Jury Awards $1 Billion to Apple in Samsung Patent Case – NYTimes.com

This article includes a brief list of the design patents the jury held that Samsung violated. Otherwise, there is nothing new in this version of the story.

Apple crushes Samsung in quest for global tech domination | Dan Gillmor | Comment is free | guardian.co.uk

“The cases in Seoul, San Jose and around the world are about everyone’s future. For people who believe in competition in technology, and freedom in how we use it, Friday’s events were bleak, indeed.”

What Apple’s victory over Samsung means | Technology | The Guardian

“Despite this result, Android is likely to keep winning the battle to run the world’s smartphones; it ran on 64% of the smartphones shipped worldwide in spring, and 80% of the smartphone shipped in China in that period; the iPhone had 12%. Android is running on phones that are getting cheaper and cheaper all the time. It wouldn’t be worth Apple’s time to sue every company using it.”

Apple-Samsung Jury May Have Leaned on Engineer, Patent Holder – Bloomberg

“Jurors who zipped through more than 600 questions in three days to arrive at their verdict in the intellectual-property battle between Apple Inc. (AAPL) and Samsung Electronics Co. (005930) had as their leader an engineer with a patent to his name.
Velvin Hogan, foreman of the nine-member panel, told the court during jury selection last month that he spent seven years working with lawyers to obtain his own patent, one covering “video compression software,” a hobby of his.”

Disaster for Samsung: Jury awards Apple billions in patent case — Tech News and Analysis

“The jury in the “tech trial of the century” has ruled that Samsung has infringed on a number of Apple’ core patents, including one for “bounce back” technology. Worse for Samsung, the jury has also found that the infringement was intentional, which likely led it to issue a $1.5 billion verdict against the Galaxy tablet alone.”


FT Alphaville » In praise of debt mutualisation

“Steven Major, fixed income strategist at HSBC, has a remarkably sunny note out on the prospect of unlimited bond market intervention by the ECB, driving short term sovereign yields significantly lower.”

Dutch Socialists catch the scent of victory – FT.com

“The Socialist party’s supporters can taste victory and a newfound respect. The most leftwing of the mainstream parties, a group descended from 1970s Maoists, is poised to become the largest in parliament at elections next month.
A win by the SP and its leader Emile Roemer on September 12 could mean a reversal for a country that has been one of the strongest advocates of austerity policies throughout the eurozone crisis. If the party takes the Netherlands out of the German-led camp of countries pressing for stricter EU budgetary supervision in exchange for eurozone rescue measures, it could shift the balance of power in Europe as a whole.”   

Preferred Holders In Spanish Banks May Share the Pain – WSJ.com

“Spain may impose losses on preferred shareholders and junior bondholders at banks that receive government aid, a disputed move that would affect tens of thousands of small savers, under legislation being prepared by the government.

The legislation, required under Spain’s bank-bailout agreement with the European Union, would also expand the Spanish central bank’s powers to intervene in troubled banks.

The government expects to have the final version ready for Parliament in a few days. ”   

Portugal: Steuereinbruch torpediert Sparkurs – International – Politik – Handelsblatt

This Handelsblatt article continues what I wrote yesterday based on the NZZ article. I saw this one first but failed to post it in the links. It shows that tax receipts are down 3.5%. So although outlays have been reduced 1.7% as planned, there is still the probability that Portugal will miss its targets as Portugal expected a 2.6% reduction in tax receipts.  

Ireland raises €1bn in bond sale – FT.com

“This was the first time Dublin has issued amortising bonds, which are aimed at the pensions industry as they offer investors a steady return over a long time period. The NTMA hopes to raise a further €3bn-€5bn from these types of bonds over the next 18 months, which would help it to exit its European Union and International Monetary Fund bailout on schedule by 2014.
The bonds were offered at yields of between 5.72 and 5.92 per cent, reflecting improving investor confidence in Ireland’s economic recovery. This week yields on Ireland’s benchmark 8-year bonds fell below 6 per cent for the first time since the country was forced out of international markets in September 2010.”


United States

BBC News – US manufacturing growth still weak, PMI survey shows

I missed posting this on Thursday:

“US manufacturing growth remained weak in August, according to a closely-watched survey.

The Markit flash US Manufacturing Purchasing Managers’ Index (PMI) rose to 51.9 in August, up from 51.4 in July, its third lowest reading in 35 months.”

The Age of Niallism: Ferguson and the Post-Fact World – Matthew O’Brien – The Atlantic

“We live in a post-truth age. That’s the term David Roberts of Grist coined to describe the way the way lies get amplified in our media ecosystem. (If I were feeling cynical, I might say we live in a pre-truth age — maybe things have always been this deplorable). It’s bad enough when politicians do it. It’s even worse when journalists do too. Now, everybody has biases and those biases unwittingly slant the way we frame facts — myself included. That’s why I try to follow best practices of writers like Felix Salmon. I try to show my work, and admit when I make mistakes. The irony is that there’s an academic who would probably agree with all of the above. His name is Niall Ferguson. His early academic work was as good as his punditry is bad. It’s a shame that Niall Ferguson wasn’t the Niall Ferguson who wrote the Newsweek story.”

John Cusack & Jonathan Turley on Obama’s Constitution « naked capitalism

Ryan’s Biggest Mistake – NYTimes.com

Gawker’s Romney Files: Seven Takeaways : The New Yorker


Economy elsewhere

China Q2 bank earnings to signal end of easy profits | Reuters

“China’s big banks are set to report possibly their last set of bumper profits in coming weeks as weak economic expansion, shrinking deposits and a more competitive interest rate market point to more modest earnings growth in the future.

The net interest spread has tightened to just 0.9 percent, based on the lowest permissible lending rates and highest permissible deposit rates, from more than 3 percent as recently as June.”

China factory sector shrinks most in 9 months: survey | Reuters

“China’s factories contracted in August the most in nine months according to a survey showing falling export orders and rising inventories, signs that more policy action is probably needed to stop a slowdown in economic growth now in a seventh quarter.”

Australia declares resources boom is over | Reuters

From Thursday:

“Australia’s resources minister on Thursday declared the end of the country’s mining boom, a day after the world’s biggest miner BHP Billiton (BHP.AX) shelved two expansion plans worth at least $40 billion.”


Why The Internet Hates My Name (It’s The Accent Marks) | TechCrunch

 “it’s the archaic remnants of how computers came to be programmed in the U.S. during the mid-twentieth century. When standards for exchanging data between computers such as ASCII were created. They created programs still widely used today recognizing certain symbols and names — accent marks are not typically among them.”   

Windows 8 review (for desktops and laptops) | Software | Reviews | PC Pro

“It’s not an essential update for most laptops and desktops, but Windows 8 delivers some subtle improvements on its predecessor”

Windows 8 review (for tablets and touchscreen devices) | Software | Reviews | PC Pro

“Windows 8 has seen Microsoft’s OS embrace touch in a big way, and it’s by and large a roaring success” 

Facebook is collecting your data — 500 terabytes a day — Data | GigaOM

“How much of your data is Facebook collecting every day? Some new stats from the company reveal just how large its user base is, and what big data means to a company with 950 million users.”

Who inherits your iTunes library? – MarketWatch

“Many of us will accumulate vast libraries of digital books and music over the course of our lifetimes. But when we die, our collections of words and music may expire with us.”  

Two moves that tell you everything you need to know about Twitter’s future — Tech News and Analysis

“As Twitter shuts off the access that services like Instagram and Tumblr used to have to its valuable “follower graph,” it is also promoting the new relationships it has with media players like NBC. Between them, those two moves speak volumes about the company’s future.”




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