Tuesday 28 August 2012

Apple vs. Samsung: Is the verdict pro-consumer?


The victory of Apple against Samsung in the famous patent case indicates the arrival of hard days for its rivals. Samsung has termed its defeat as loss to consumers; on the contrary, Apple has termed its victory as the gain for the American patent system and innovation. The judgment is symptomatic of the high investment in innovation to be made by Apple’s rivals, which indicates higher costs for everyone.

Though, Samsung will have to pay $1.05 billion to Apple. But ultimately, it is its customers, who will have to pay higher prices as the device manufacturers pay more to Apple for license of the technology they already use. It would result in several Samsung and Android devices going out of the market, whereby the consumer will face shortage of choice.
Following are the devices that will be adversely affected:
1.      Galaxy S,
2.      Galaxy S II,
3.      Nexus S,
4.      Mesmerize,
5.      Vibrant,
6.      Fascinate,
7.      Skyrocket,
8.      Continuum,
9.      Prevail,
10.  Infuse,
11.  Gem,
12.  Mesmerize,
13.  Indulge,
14.  Replenish,
15.  Epic 4G Touch,
16.  Droid Charge,
17.  Nexus S smart-phones
18.  Galaxy Tab and
19.  Galaxy Tab 10.1

The verdict may result in a gain for Apple in terms of market share and profits in the form of sharp rise in its share prices after the verdict. But the verdict does not lie in the favour of consumers for many reasons.

Choice and competition must prevail in the market, which is not going to be the aftermath of the decision. This may make the losers unite to take revenge from Apple to often beat Apple in whichever way they can.
Further, as observed by Judge Richard Posner in an earlier Apple versus Motorola case, Apple often adopts patent litigation as a tool not for safeguarding breakthrough innovation, but to stall and delay competitors. 

Conclusively, there is an open question. Does the verdict favour the market and consumers of smart-phones?

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