It was the $1 billion question that campus technology leaders were asking Aug. 25: What does Apple’s victory in an epic patent dispute over its fiercest rival mean for the U.S. smart-phone industry?
Analysts from Wall Street to Hong Kong debated whether a jury’s decision that Samsung Electronics Co. ripped off Apple technology would help Apple corner the U.S. smart-phone market over Android rivals, or amount to one more step in a protracted legal battle over smart-phone technology.
Many analysts said the decision could spell danger for competitors who, like Samsung, use Google Inc.’s Android operating system to power their cell phones.
“I am sure this is going to put a damper on Android’s growth,” New York-based Isi Group analyst Brian Marshall said. “It hurts the franchise.”
The Silicon Valley jury found that some of Samsung’s products illegally copied features and designs exclusive to Apple’s iPhone and iPad. The verdict was narrowly tailored only to Samsung, which sold more than 22 million smart phones and tablets that Apple claimed used its technology, including the “bounce-back” feature when a user scrolls to an end image, and the ability to zoom text with a tap of a finger.
But most other Apple competitors have used the Android system to produce similar technology, which could limit the features offered on all non-Apple phones, analysts said.
“The other makers are now scrambling” to find alternatives, said Rob Enderle, a leading technology analyst based in San Jose.
Seo Won-seok, a Seoul-based analyst at Korea Investment, said the popular zooming and bounce-back functions the jury said Samsung stole from Apple will be hard to replicate.
The companies could opt to pay Apple licensing fees for access to the technology or develop smarter technology to create similar features that don’t violate the patent—at a cost likely to be passed onto consumers.
Apple lawyers are planning to ask that the two dozen Samsung devices found to have infringed its patents be barred from the U.S. market. Most of those devices are “legacy” products with almost nonexistent new sales in the United States. Apple lawyers also will ask that the judge triple the damage award to $3 billion, because the jury found Samsung “willfully” copied Apple’s patents.
A loss to the Android-based market would represent a big hit for Google as well.