Apple v Samsung - why the hubbub?

A few friends asked me to clarify what I was talking about on Bloomberg this morning regarding the Samsung v Apple "War" - which I thought was quite a quaint way of putting things.

The basic story is this (for anyone not part of the "technosphere"): Apple has filed a lawsuit against Samsung in various countries - halting the sale of the Samsung Galaxy Tab 10.1 and a number of their smartphones. Apple's claims are that Samsung has violated a number of their patents - which is well outlined here at This Is My Next. It is one hell of a roundup and discusses all of the points that Apple is contending.

Now, this sounds bad for Samsung, but there are a number of issues that Apple was unable to address which include getting the patent infringement cases going in all of the European countries since they did not file patents in all of the countries they would have liked. Additionally, the Dusseldorf court ruled that Samsung could sell the Galaxy Tab 10.1 to be sold everywhere in Europe EXCEPT Germany. And there are hints that Apple came to Germany to fight the patent infringements because of the way the German courts lean.

And then recently, Apple also filed a patent infringement lawsuit in Australia, which Samsung is also fighting - and has voluntarily chosen to delay its launch for a month.

So why all the fighting - especially with two companies that have been joined at the hip for so long? For instance:

• Apple relies on Samsung for the memory chips for the Macbook Pros, processors for the iPhones, iPods and iPads and displays for the iPads
• Apple had to request from Samsung some help in completing iPad2 orders since LG Display could not effectively manufacture the displays necessary for the iPad2
• Even in the pursuit fo the Retina Display performance for the iPad3, Apple had to enlist both LG (the originator for the Retina Display), Samsung and Sharp.

Samsung is currently the world leader in display technology - even if it has not invented NanoLEDs or Retina Display (as LG has). But its Super AMOLED technologies and its manufacturing prowess - and the strongly believed rumor that Samsung is building the Google Nexus Prime phone, is it any wonder why Apple is madly attacking Samsung?

Where Apple is strong; where Samsung is strong

As I discussed on the video, Apple has the benefit of focus - it builds only one type of tablet, one type of phone and a couple of types of iPods and computers. But wait, it does not build them - it designs them - and outsources the design and manufacturing to friends in China, Korea and Japan.

Apple also has the retail channel with the Apple stores - which ensure Apple a solid understanding of the product lifecycle and the challenges the customers have with the product - directly from their Geniuses and their staff. Samsung has tried this (see the Samsung Experience at Columbus Circle in NYC), but as the reviews on the Google page point out - its a showroom, not an engagement retail store.

Samsung is now having to deal with:

• 11 Android smartphones (and at least another 5 on the way including the Galaxy Q)
• 4 Windows smartphones
• 6 Bada smartphones (yeah, I had no idea what bada was either)
• 3 current tablets and at least four more going to be announced this week which includes the rumored tabphone

Combine all of those separate product offerings and then add on the research and development along with the component companies - and you have the makings of a HUGE conglomerate which might have some difficulties focusing on one particular product.

The benefit that Samsung has is its powerful manufacturing capabilities - and the incredible amount of effort they have put into new technologies like the displays.

Samsung as a company will not have much to fear about the injunctions since they will more than likely fight it out in the courts or find a way to mollify Apple. In addition, Samsung has a large number of companies it supplies to already. And Apple - well, Apple can invest $1B in Sharp to get better displays and not be so dependent on Samsung or LG for display technologies.

Patent Disputes

But the crux of the issue is that Apple feels that Samsung cheated on the design of its products since it had intimate knowledge of the iPad and iPhone and could leverage the designs in their own products. And now Samsung is going the defensive patent infringement route - filing in Germany and Australia. The sad part of this is - a lot of lawyers are going to get rich, customers will get frustrated and someone is going to have to blink.

I wonder how the Oracle/Google fight is turning out?