Saturday 25 August 2012

Poison Apple or Seed of Innovation?

Less than 24 hours have passed since the US courts issued a verdict in the epic Apple vs Samsung intellectual property battle. 

"Make your own phones" was the closing plea of Apple's legal team to the Samsung side. And the jury, it seems, agreed with them. 

Pundits around the world are already ganging up on the decision, citing how bad the ruling will be for marketplace competition, not least for Samsung who've been ordered to pay Apple around $1billion dollars in compensation. Let's not even mention that fact that Samsung now faces having its entire core product line banished from existence altogether, in America at least. 

This court case has opened up some serious questions about capitalism and how or what is deemed acceptable behaviour in the pursuit of profit. Copying, it would seem, is not. 

But isn't copying the natural way of the capitalist world? Aren't High Street fashions just watered down, plagiarised versions of their catwalk counterparts? Aren't own brand supermarket cornflakes just a less fancily packaged version of their branded competitors? And don't most cafes and restaurants serve pretty much the same food and drink, albeit served up in slightly different dishes and cups?

In fact, when it comes to "innovation" I'd estimate that the vast majority of organisations would be hard pushed to claim that 100% of their product or service line is entirely of their own exclusive thinking. In fact most of them would be struggling to claim that even 10% of their product or service line is unique. 

One of the core principles of developing an effective business strategy is looking at the competitive market place. Call it PEST, SWOT, whatever you like, but it's impossible to compete unless you seriously (and thoroughly) look at what the competition are doing. And, naturally, part of your strategic response will be to replicate, develop or simply copy and offer it to your customers too. 

Are we really prepared to believe that the executives and technicians at Apple are so special that they've never looked at what the competition are doing? Ever?

But that's exactly what this decision would have us believe. Apple are the absolute exception to this rule. And they are, indeed, exceptional. Their products are utterly innovative. There's no denying that. 

But not based on anything else, ever? Really?

Samsung's products also have their own ingenuity. Exceptional in their own way. Have they borrowed some of Apple's groundbreaking technology? Undoubtedly. One of the key documents in the case cited how Samsung had concluded that to compete in the smartphone marketplace, being more like the Apple iPhone would be a must. 

And here's where the legal argument diverges from the commercial. 

In the pursuit of profit, Apple is deservedly the winner. They invested the time, developed the technology, legally protected their ideas and deserve to profit (much more handsomely than they already do) from their innovations and their subsequent commercialisation. 

Strategically, they've played it by the book. Knowledge and technology was their asset, and they've protected it and defended it to the hilt. 

I think, therefore I amDescartes couldn't have said it better himself. 

But when it comes to thinking, and in this case, pursuing or developing knowledge, Samsung have taken the seed of Apple's innovation and have advanced it further still, enhancing the experience, and winning the consumer confidence in their product line. Let's not forget that Samsung smartphones outsold Apple iPhones this year, 40million to 32million making them 25% more popular. 

Their starting point was Apple, their end point was (arguably) better. 

And surely that's what competition's about, after all? If not, why are we bothering with capitalism at all? And what are we really defending?

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