Opinion: Apple's HTC deal shows a Samsung peace is possible

Following HTC’s deal with Apple [AAPL], I wonder just how long Samsung will be able to maintain the fiction that Apple is the only aggressor in their lengthy smartphone war. 

HTC reaches peace deal with Apple

Barroom blitz

I’m no judge. I’m not expert in international patent law. The outcomes of the conflict so far have shown that Samsung wins some, Apple wins some. To me this lack of consistency in legal outcomes suggests both firms are a little bit right, and a little bit wrong.

Perhaps Samsung and Apple should reach a deal.

The HTC deal shows Apple’s willing to negotiate. I don’t see similar willingness on Samsung’s part: indeed Apple’s processor maker just sidelined its senior Apple-facing executive and raised the price of the chips it makes for its once largest customer by a princely 20 per cent. 

That doesn’t appear to reflect the actions of a firm that really wants peace.

Apple fought the price rise, of course:

“Apple first disapproved the request [of a big price hike] but had to accept it because it could not find any other substitute,” wrote The Chosum Ilbo.

With nowhere else to go, Samsung knows it has a grip on Apple and now it has begun to squeeze that anatomy. 

“Recent developments confirm that the war between Samsung and Apple is on more fronts than initially anticipated,” Mark Newman at Bernstein said in a report as cited by the Financial Times. “We do not agree that Apple holds all the cards here and believe that, although this war may continue for some time, it will likely have little negative impact on Samsung.”


So who is the aggressor in this conflict?

You’d imagine long ago when Apple first approached Samsung to point out the perceived similarities between its mobile devices and those manufactured by its biggest supplier, the two firms could have reached some form of compromise. 

It didn’t happen.

Instead, displaying the kind of passive aggressive attitude you might expect from a man who continues to chat up your girlfriend (or boyfriend) in the bar after they have been asked to stop, Samsung ignored Apple’s request to arrange a compromise and called its bluff.

Apple had little choice: 

  • If it failed to stand up to Samsung in protest at its perception that the Korean firm was imitating its products, it would walk away with nothing. 
  • If it chose to protest doing so threatened its relationship with its largest component supplier, would cost billions in legal fees, and -- given the vagaries of litigation -- would have no guarantee of success. 

It took the latter path. 

Everyone attack

The battle so far has not been straightforward. Samsung has replaced much of its lost Apple business, while Apple continues to face problems getting its new suppliers to ramp up production of the components it needs.

These component supply problems have apparently been hampering Apple and Foxconn’s ability to produce Apple’s mobile devices in huge quantities. This is impacting Apple’s business, even while Samsung becomes the world’s biggest device maker.

Apple knew the risks when it chose to stand up to its partner. It knew doing so would cause it some long-term problems. I also think it truly believed Samsung would eventually reach some form of deal. I also believe Apple felt itself to be justified. I don’t think anyone chooses to take actions which can be so self-destructive unless they feel themselves to be in the right. Though there’s a difference between feeling justified and being justified.

I believe Samsung is determined to fight hard to seize and retain a huge slice of the mobile market. I believe it will use every tool its arsenal to keep the position it has won.

I realize the Apple versus Samsung discussion has partisan opinions on both sides. I don’t believe those of us watching from the sidelines can make an educated and informed decision based on the information we have available today. 

Fortunately, history travels. It changes over time. In twenty years the true story of this conflict will be known as senior players in today’s war begin to share their versions of events. It will be interesting to see which of the two firms is able to feel pride for their actions during today’s conflict tomorrow. 

I’d argue that the proudest moment is still to come. I believe it will be the one where both parties reach a deal. To paraphrase a comment from the Apple slogan book: “It’s good to feel pride at the litigation you don’t ship, as well as the litigation you do.”

The HTC deal shows a deal can be done. I'd urge both parties to sit down, make some kind of arrangement, and move on. 

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Copyright © 2012 IDG Communications, Inc.

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