If Samsung Copied Apple, Why isn’t it Worth $600B?

You’re probably tired of reading about Apple v. Samsung, but I just wanted to make one point that I haven’t seen made elsewhere. I have not followed and do not really care about the legal minutia of the case, but from what I understand, Samsung was found to have willfully infringed on Apple’s patents.

But here’s the rub: does anyone actually believe that a Samsung phone is the same as an iPhone? I found an amusing story about customers who interpret the result of the case as a ruling that Samsung devices are as good as Apple devices, so why not buy the cheaper Samsung devices? But this is an unenlightened view of user experience design, and it’s unsupported by actual market results.

I certainly don’t believe Samsung phones are equivalent to iPhones. Samsung devices are a vastly inferior substitute. And I am confident that this would not change if Samsung were allowed to use every one of Apple’s patents. The whole mentality of checking off features that have been implemented is totally contrary to how we experience technology. The details of the implementation matter a lot, and cumulatively over all the innovations we are talking about, there is no way that Samsung can copy Apple’s implementation.

I’ve read a lot of arguments along the lines of “Apple’s innovations are trivial and should not be patentable.” I disagree with the premise: Apple is one of the most innovative companies in the world, and yes, that includes a lot of innovations that look obvious in retrospect. But I agree that Apple should not have patent protection, because nobody can copy Apple in the first place. How do I know? Let’s take a look at the results in the mobile phone market.

According to a recent article at Fortune, Apple sells 8.8% of mobile phones, but it has 73% of profits in the market. Samsung sells 23.5% of phones and earns 26% of profits. Everyone else is barely breaking even or losing money.

This does not look like a market in which Apple’s competitors are successfully copying it. It looks like a market in which Apple’s competitors are trying to copy Apple, and failing.

The point of patents is to incentivize innovation through a grant of monopoly. But what Apple’s success, pre-verdict, clearly shows is that in many markets, mobile computing among them, it’s a lot harder to copy innovations than you think. Apple’s real innovation is putting designers in charge and building a corporate culture in which everything is subordinated to making elegant products that people want to use. I’d like to see Samsung try to copy that, but I think the difficulty of doing so gives Apple all the monopoly it needs.

4 replies to “If Samsung Copied Apple, Why isn’t it Worth $600B?

  1. Pingback: Imitation Ain’t Easy

  2. *daniel

    Very well said. I wrote something similar on my blog last night, some musings about the culture of design at Apple vs Samsung and how important that is.

    It’s high time that more firms take design seriously. Even Google, a firm that has software engineers firmly in charge, is starting to realise that visual identity *means* something.

  3. Pingback: Copying Apple and FailingTightWind | TightWind

  4. Mike Zajko

    I grudgingly respect Apple’s culture of design, I just find it a little overrated. The culture of Apple-adoration generates a lot of free press for product launches and usually fails to acknowledge the company’s smart (and shrewd) business practices. The products are generally quite good (I’ll keep my design gripes to myself) but Apple is a powerful cultural force in its own right and it knows how to work the market.

    As I understand it, I think the chart you cited here paints a misleading picture. What we’re seeing are the profits (not market share) of mobile phone vendors (in the U.S.?) – Apple’s entry into the market in 2007-2008 testifies to a shift towards smart phones and Apple’s ability to make money. This could be contrasted with a graph of market share among smart phones specifically –
    (http://tctechcrunch2011.files.wordpress.com/2012/01/u-s-smartphone-market-share.jpg)
    - where Apple doesn’t come off looking as hot.

    If you’ll allow me to quote: http://techcrunch.com/2011/12/31/freight-train-kept-a-rollin/
    “Partly because America is not the world. The iPhone 4S was a huge hit in the USA and the UK, but not so much in the rest of Europe. It’s probably not a coincidence that prepaid (ie no-contract) mobile service is more popular in Europe than America (though that may slowly be changing) and much more popular, verging on ubiquitous, in the developing world. Right now Android pretty much owns the entire prepaid smartphone market.

    But it’s not just the low end of the market, and it’s not just the availability of many different handsets. Samsung alone has sold more than ten million Galaxy S IIs, including mine. I went Android because I disapprove of Apple’s hegemonic, hermetically-sealed approach to technology, even though I think the iPhone 4S is a somewhat better phone, but that’s just me. It seems that many many millions of people genuinely prefer Android’s anarchic, fragmented, and often clumsy UX and ecosystem to Apple’s seamless sleekness. That may seem strange to some, but it has become inarguable.”

    Thanks for your blog (and papers) by the way – much appreciated.

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