Eli Dourado

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.