In Depth

Apple copyright case could cost Samsung $2bn

If Apple wins, experts say that the cost may be passed on to Samsung's customers

JURY selection gets underway today in the legal battle between Apple and Samsung in the US District Court in San Jose. Apple is suing its rival for damages amounting to $2bn (£1.2bn) for infringement of copyright.

The case is the latest in a long-running feud between the two tech firms. Each side accuses the other of ripping off protected designs and features. A string of rulings have found in each side's favour, but so far years of litigation between the two firms have had little real effect.

In 2012, Samsung lost its first major court battle with Apple and was ordered to pay $930m in damages. That amount is "pocket change" to Apple, one of the richest companies in the world, says the New York Times, and it made little impact on Samsung either, whose market share has grown enormously since the ruling: one in every three smartphones sold worldwide in 2013 was a Samsung.

So could this latest skirmish between the two tech companies have any real effect?

What does Apple claim?Apple says that Samsung took key features of its phones and tablets including the slide-to-unlock feature that brings a smartphone or tablet to life with a single swipe gesture.  It also claims that the South Korean electronics company took tap-from-search, a feature that allows users to instantly make a phone call or view a location on a map by tapping on a link in their mobile browsers.

Apple identifies similarities between the voice-activated assistant Siri and Google's voice controls, and infringements of their autocorrect and unified search software.

According to Apple's attorneys "Apple revolutionised the market in personal computing devices. Samsung, in contrast, has systematically copied Apple's innovative technology and products, features and designs, and has deluged markets with infringing devices".

How does Samsung respond?Samsung says that Apple is at fault and that it has actually stolen a considerable amount of Samsung's intellectual property, The Guardian explains. "Samsung has been a pioneer in the mobile device business sector since the inception of the mobile device industry," Samsung's attorneys claim. "Apple has copied many of Samsung's innovations in its Apple iPhone, iPod, and iPad products."

How will the case be adjudicated?The case will be heard by a jury presided over by judge Lucy Koh , who also oversaw the last trial in which Samsung was found to have infringed one of Apple's patents. Each side will have just 25 hours to present their case.

How much is at stake?Apple is seeking about $2bn in damages from Samsung for selling phones and tablets that violate its software patents. Apple's lawyers say that the company is owed $40 per Samsung device that has been sold with software that violates its intellectual property. If it loses the case, Apple's legal costs are expected to come to around $6m.

How does Google fit in?Some experts say that the real target of the suit is in fact Google, whose Android operating system is at the heart of many of the alleged violations.  The New York Times notes that Apple's founder Steve Jobs once said: "I'm going to destroy Android, because it is a stolen product." Many of the features Apple is going after are actually properties of Google not Samsung.

"Google's been lurking in the background of all these cases because of the Android system," Mark McKenna, a property law professor at Notre Dame University told the New York Times. "Several people have described the initial battle between Samsung and Apple as really one between Apple and Google."

But Apple cannot sue Google directly, because it is only when Android software is implemented in a device that it potentially breaches Apple's patents.

How will this affect consumers?If Apple does succeed in winning damages, some experts believe that the cost may be passed on to Samsung's customers. Tech Radar says that "if Apple gets its way, we could see Samsung Galaxy device prices hiked up to cover the shortfall."

Will Samsung have to pull its products?Probably not. After winning its previous court case Apple tried to have some Samsung products banned - "a goal that Apple identified as more important than monetary compensation," says Bloomberg - but failed.

If it wins this case it "can then try anew for a sales ban" against Samsung but it "will prove difficult", believes Bloomberg. Not least because the presiding judge, Lucy Koh, twice rejected Apple's requests for a ban after the 2012 case.

iPhone 6 will spark 'massive upgrade' with super-size screen

18 March

Demand for a new, larger-screened iPhone 6 will lead to a “massive upgrade cycle” among existing Apple customers and lure back former fans who have switched to Android, according to an Apple analyst.

“Large-screen envy is prevalent among the iPhone installed base,” said Brian Marshall, head of International Strategy and Investment’s technology team. 

He predicted that Apple will launch two versions of the iPhone 6 this summer, with screens measuring 4.7 and 5.5 inches.

Both would be significantly larger than the current 5S and 5C models, which both have a 4-inch screen – and the larger of the two would eclipse the 5.1-inch Samsung Galaxy S5, expected to be a strong rival to the iPhone when it goes on sale next month. 

“It is hard to argue that larger screen iPhones won’t increase the replacement rate,” writes Chuck Jones in Forbes. “I have an iPhone 5 and have found the screen size limiting when I’m reading emails or websites. The key question is how high could the replacement rate move up to since much of the recent install base is locked in for two years.”

Marshall predicts that as much as 14 per cent of an estimated 260 million iPhone users could upgrade to the new model in the second half of the year. That, he says, could lead to a significant rise in revenue for the company.

Reports last week (see below) from component suppliers suggest that Apple is preparing to build the iPhone 6 in record numbers.  

iPhone 6: Apple paves way for 'biggest ever' launch

18 March

APPLE is gearing up for its biggest-ever product launch, reports suggest, with preparations underway to build 90 million iPhone 6 handsets this year. 

An analyst at Citigroup Global Markets told the Commercial Times that Foxconn, Apple's Chinese manufacturer, was "expected to land orders for 90 million units of the iPhone 6 from Apple in 2014".

The analyst, Wei Chen, went on to say that the new handset is expected to outsell the current model.

"Buoyed by shipments of iPhone 6, Apple's smartphone shipments are expected to rise 23 per cent in 2014 compared to 13 per cent growth posted a year earlier," he said.

Most industry commentators had predicted that the iPhone 6 would go on sale in autumn this year, but these new figures hint at an earlier release date, according to technology news website BGR.

"Assuming the 90 million iPhone 6 order is accurate, it may mean that Apple may launch the 2014 iOS smartphones a lot earlier than anticipated," it suggests.

Apple sold 50 million iPhone 5S handsets, launched in October 2013, before the end of the year. If it expects 90 million iPhone 6 sales by the end of 2014, it must either be planning for significantly higher demand, or an earlier release date.

The early launch theory received fresh backing today with reports that Apple has signed a deal with Samsung to manufacture a substantial proportion of the A8 computer chips that will sit at the heart of the iPhone 6. That contradicts earlier reports that the contract would be awarded exclusively to another company, Taiwan Semiconductor Manufacturing Company (TSMC).

"[Apple's] latest move is being read by analysts as its way of ensuring that the pre-set production and release calendars for the iPhone 6 will take place as planned," the International Business Times reported.

"With two heavyweight names, Samsung and TSMC, jointly handling the A8 production duties this year, there is little room for delays to mar the iPhone 6 release date."

In addition, The Wall Street Journal reported recently that Apple is planning to expand its engineering teams in Shanghai and Taipei as it seeks faster sales growth in China. 

"The hiring push reflects Apple's need for more engineers to work with Asian suppliers on developing components for iPhones and iPads as it plans for faster and more-frequent product releases," the paper reports. "Apple also is increasing its number of supply-chain managers, following criticism over factory conditions at some of its suppliers."

In the past Apple has sought to limit its product range to a few highly profitable devices that would be updated once a year or less. As it faces increasing competition at the top end of the smartphone market, it is responding with a wider range of products. Last year's iPhone update included two models for the first time - the premium 5S and the slightly cheaper 5C - and some analysts are predicting that the iPhone 6 will come in two sizes.

Although Apple has not confirmed any details of the new handset, industry insiders have suggested that the new phone is likely to feature a larger, more scratch-resistant screen, vivid colour reproduction making use of "quantum dot" technology and a new operating system.

Apple has not commented on any of these reports.


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