Business Watch: Launch the product – then launch the lawsuit


Dominic White says the recent lawsuit launched by Apple against Samsung is likely to be drawn out and complex

It seemed almost inevitable that Apple would take someone to court over the iPhone and the iPad, given the number of similar-looking tablets that have hit the market since it launched the blockbuster devices.

Now Samsung Electronics has received a writ through its letter box.

Apple is suing the Korean gadgets giant, claiming that Samsung’s Galaxy mobile phones and tablet “slavishly” copy the iPhone and iPad, according to court papers.

The lawsuit acknowledges that Galaxy products use Google’s Android operating system, which directly competes with Apple’s proprietary mobile software.

But Apple says it’s concerned about the way Galaxy products actually look, including their screen icons. It alleges that Samsung has violated Apple’s patents and trademarks.

Apple spokeswoman Kristin Huguet was blunt in her assessment, saying: “This kind of blatant copying is wrong.”

By way of response, Samsung representative Kim Titus told Reuters in an email that the company would protect its intellectual property and “actively” respond to
the lawsuit.

“Samsung’s development of core technologies and strengthening of our intellectual property portfolio are keys to our continued success,” wrote Titus.

Samsung, which seems to have carved up the market for flat-screen TVs, has emerged as the biggest rival to Apple in tablets.

But it faces 16 claims against it from Apple, including unjust enrichment, trademark infringement, as well as 10 patent claims.

Apple’s detailed claim alleges that earlier versions of Samsung smartphones did not embody the same combination of Apple’s designs.

“Even the icons in earlier versions of the Samsung smartphones looked different because they had a variety of shapes – and did not appear as a field of square icons with rounded corners,” it says.

Like most of these lawsuits, it’s likely to run and run.

Another joint venture

Less than two years after merging their UK mobile businesses to create Everything Everywhere, the parent companies of Orange and T-Mobile are at it again.

Orange-owner France Telecom and T-Mobile’s parent Deutsche Telekom, claim they will save a combined £1.15 billion a year by combining forces when they buy things such as network kit, smartphones and IT infrastructure.

The deal will affect the purchase of roughly 45 million devices annually across the two groups.

It’s a clear sign that the pressure to slash costs that drew the pair into the UK joint venture is continuing to grow and will inevitably lead to more of these arrangements – perhaps even full-blown mergers.

Not only are operators everywhere under massive pressure to be competitive on tariffs, but they are also facing looming investments in 4G networks to add to the pressure to expand existing networks to cope with booming data usage.

The former French monopoly reckons it can save £800 million a year by 2015, as a result of the joint venture while its German counterpart expects to save an annual £355 million.

If they can hit those targets the cost of establishing the £31 million joint venture, including a 200-strong workforce in Paris and Bonn, will look like money well spent.

France Telecom will probably save more because it’s less of a global company than Deutsche Telekom, which has bigger buying power already.

Deutsche Telekom has said that the collaboration between the companies had been helped by the “familiarity with operating together” developed through setting up Everything Everywhere, run by Tom Alexander.

It’s early days, but early results from that joint venture have not been hugely impressive. Unsurprising then, that many analysts were somewhat sceptical about whether the companies would hit their targets.

But Thomas Wehmeier, principal analyst at Informa Telecoms & Media was more positive. “The greatest risk to the success of the joint venture lies in its execution. But with both partners highly committed to the partnership and sharing well-matched motivations, those risks appear to have been recognised and mitigated.

“Nothing motivates like money and the goal of securing £1.15 billion in annualised savings by 2014 will certainly give strong impetus to the joint venture.”

The partnership still needs the blessing of regulators in a number of authorities.

Fujitsu’s clever ploy

Finally, Charles Dunstone’s TalkTalk and Virgin Media have given their blessing to Fujitsu’s shock plans for a wholesale fibre-to-the-premise network, which it says would reach five million premises.

The Japanese information technology services giant plans to bring super-fast fibre services to the “final third” of the population, with initial services planned to start during 2012.

It is an extremely ambitious plan and a big challenge to BT, which has been gradually rolling out high-speed broadband via fibre-to-the-cabinet, which can’t offer services as fast.

But in order to get the scheme off the ground, Fujitsu needs to secure at least 60 per cent of the available money on the table from the government and get access to BT.

The well-regarded Enders Analysis reckons Fujitsu’s announcement may in reality prove to be a clever sales ploy, to “encourage local government to opt for ‘wholesale high-speed broadband in a box’ from Fujitsu, helping the company improve its market position in wireline access, having previously lost out to Huawei”.