Still, because rivals couldn’t match Apple’s average sales price and profit margins, they were falling behind. In the fourth quarter of 2008, Nokia, which had long been the phone industry’s profit leader, sold 113 million devices worldwide, about 15 million of them smartphones. It made about $1.2 billion in profit on all those phones. That same quarter, Apple sold just 4 million iPhones. But that single device earned Apple a profit of $1.3 billion.
These numbers—which Asymco’s Horace Dediu has helpfully archived here—provide the backstory to an industry in panic. If you were a phone maker watching the iPhone’s sudden rise in 2008, you had to make a quick decision. A storm was blasting through your business and your survival depended on how you reacted.
One option was to do nothing. A lot of firms opted for this path—Nokia and RIM, for instance, seem to have decided that the iPhone was a blip, a cultish device that would never reach mass appeal, so why bother taking it on?
Another option was to try to leapfrog Apple. You could spend many months, maybe even years, working on devices that aimed not just to match the iPhone’s innovations, but to beat them. This was Palm’s idea. Belatedly, it’s what Microsoft began to do, too.
Then there was a third choice. You could just copy Apple. You could borrow the iPhone’s key ideas, make a half-hearted attempt to dress them up in your own brand, and bake them all into your product line-up.
On Friday, a federal jury decided that Samsung was guilty of doing just that. But you don’t need this decision, nor any of the damning internal documents uncovered during the patent case, to realize this. Just look at the devices Samsung released in response to the iPhone—for instance, the 2010 Galaxy S, pictured above. If that’s not copying, the term has no meaning.
It’s tempting, after such a sweeping verdict in Apple’s favor, to conclude that Samsung’s decision to mimic the iPhone was a terrible mistake. The firm will now be on the hook for at least $1 billion in damages, and the judge could triple that amount. Samsung will likely face sales injunctions on many of its products, and will be forced to quickly design around Apple’s patents in its current and upcoming devices, if not to pay a steep licensing fee. Other companies that took inspiration from Apple—including Motorola, HTC and, at the top of the chain, Google—will also be stung by this decision.
But if you study what’s happened in the mobile industry since 2007, a different moral emerges. It goes like this: Copying works.
by Farhad Manjoo, PandoDaily | Read more:
