Samsung will be fine. The biggest losers here are consumers. If the verdict stands, then the costs of the judgment will be reflected in the cost of mobile devices. Furthermore, other manufacturers will feel the need to buy Appleâ€™s official permission to build useful phones, passing down the possible $20-per-handset fee.
The smartphone market is cut throat. Let’s say US$199 is the sweet spot for high-end smartphones with a two-year contract. A $20 license fee will not result in a $219 price. The smartphone hardware brands will eat it, reducing profit margins. But that’s assuming brands will want to continue designing smartphones and tablets that look like the iPhone and the iPad. In the short term I don’t think there is a way out of paying a license fee for lookalike products, but in the long term I suspect smartphone brands will do what Nokia did: innovate.
The Lumia 800 / 900 smartphones have not sold as well as expected, but that’s not an excuse for not innovating. Some might argue to sell a lot the smartphone must look like the iPhone. In a world filled with me-too companies and me-too consumers that might actually be true. If that’s the road a smartphone brand wants to take it will now, quite appropriately, cost a license fee from Apple. This does not put a copycat company at a disadvantage because copying requires considerably less resources than innovating.
And itâ€™s possible that the next great phone, the one that shames the iPhone the same way that the iPhone buried the Blackberry, will never make it to market. Designing and selling an advanced smartphone just became a dangerous business.
When has designing and selling an advanced anything not been a dangerous business? The next great phone will come. But it will not as long as Google, HTC, Microsoft, RIM, and Sony continue to believe a great phone must look like the iPhone. Maybe HP should resurrect Palm, both hardware and software. I quite liked the Pre; it was unique, undoubtedly the result of innovation.