Smartphone handset: build it yourselves

 

Build-your-own Google handset reconstructs smartphone

Barcelona (AFP) - With a smartphone that slots together piece by piece like Lego, US Internet giant Google is trying to reinvent the mobile as most phone makers are honing sleeker handsets.

The company aims to challenge its rival Apple's thin iPhones with the Google Ara project, giving smartphone aficionados the option to build their phone themselves.

Analysts say tech boffins will love it but remain cautious about how popular it may be compared to polished conventional smartphones that sit snugly in the palm.

Google says the Ara phone is part of its bid to widen Internet access to users in developing countries and could create a new industry for assembly-ready handset parts.

Google's associate, US firm Yezz, presented a prototype of the build-your-own device this week at the Mobile World Congress in Barcelona, the world's biggest wireless telecom trade fair.

The phone consists of a base structure on which various square, magnetic modular parts can be attached: screen, battery, camera, speakers and more. Google plans to release it in three sizes.

 

Build-your-own Google handset reconstructs smartphone

Ara would allow users to replace individual components rather than throwing the whole thing away and buying a new handset. It says the base unit will last at least five or six years.

"That is good for the environment," said Annette Zimmermann, a telecom specialist at German consultancy Gartner.

- Emerging markets -

Ara "could reshape the mobile landscape," said Paul Eremenko, director of the Ara Project, in a presentation to experts in January.

He said it aimed to gain six billion potential clients -- the current billion people who currently use smartphones "and five billion future users", most of them in emerging markets.

Google says a mid-range Ara phone could cost between $50 and $100 to produce, but has not given details of the likely sales price, leaving questions marks over how sustainable such a product would be.

"Google is not looking to make money directly with Ara," said Jerome Colin, a telecom expert at French consultancy group Roland Berger.

"It is basically looking to spread smartphones in countries with low purchasing power, and to unify the telecom world around its Android system."

- 'Paradox of choice' -

Tech fans and bloggers queued up to see the prototype presented in Barcelona, but analysts were sceptical.

"The trend in mobile phones is to have small, thin, really integrated products. If you make a product modular it immediately means that you're going to have to make compromises on that," said Ben Wood, head researcher at consultancy CCS Insight.

"The other question mark I have is: beyond geeks, who really knows" about components? he added.

"If I said to you, which processor do you want in your smartphone, I think you could stop people in the street and they'd just look at you like you'd landed from Mars."

Eremenko acknowledged that consumers risked being overwhelmed by too many technical options when it comes to choosing components.

"We need to resolve the paradox of choice," he said in January.

Google plans a test launch of the device in Puerto Rico by the end of this year.

"We will have to see if the public takes to it," said Zimmerman.

Google dominates the world of Internet searches and its Android operating system can be used on 80 percent of the world's smartphones. It also holds a large market share in wireless tablet devices.

Its senior vice-president Sundar Pichai said in Barcelona on Monday that it was in talks with telecom companies about possibly using their networks to operate its own mobile phone services in the United States.

AFP

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Smartphone users exposed to threats from cyber hackers

KUALA LUMPUR: About seven million smartphone users nationwide are exposed to threats from cyber hackers who make use of their gadgets to steal their money.

Bukit Aman Commercial Crime Investigation Department director Datuk Syed Ismail Syed Azizan said lack of awareness on the risks of smartphone security made users easy victims.

“The modus operandi is to send short messaging service known as Trojans to users who unknowingly will be charged when replying to the SMS,” he said. “Consumers only realise this when they are slapped with high phone bills although they did not use the service.”

The scam was detected via applications such as “Type-On” which, when downloaded, would cause smartphone users to bear the cost although they had uninstalled the application.

Lookout Mobile Security was quoted by AFP as saying that worldwide, users lost millions of dollars last year via malware and toll fraud that attacked smartphone users for accessing applications from unofficial sources rather than trusted ones such as Apple or Google online shops.

Syed Ismail said police statistics recorded from January to September this year showed that losses incurred via SMS or phone calls totalled RM21.8mil.

The hackers target users of Internet banking or phone banking by hacking and abusing the network, including the online purchases of goods.

Online purchases recorded the highest losses of RM14.5mil (1,298 cases) followed by SMS or phone call with RM3.4mil (412 cases), hacking (RM3.3mil via 24 cases) and Internet banking and phone banking with RM590,000 (74 cases). - Bernama

Smartphone users exposed to threats from cyber hackers

KUALA LUMPUR: About seven million smartphone users nationwide are exposed to threats from cyber hackers who make use of their gadgets to steal their money.

Bukit Aman Commercial Crime Investigation Department director Datuk Syed Ismail Syed Azizan said lack of awareness on the risks of smartphone security made users easy victims.

“The modus operandi is to send short messaging service known as Trojans to users who unknowingly will be charged when replying to the SMS,” he said. “Consumers only realise this when they are slapped with high phone bills although they did not use the service.”

The scam was detected via applications such as “Type-On” which, when downloaded, would cause smartphone users to bear the cost although they had uninstalled the application.

Lookout Mobile Security was quoted by AFP as saying that worldwide, users lost millions of dollars last year via malware and toll fraud that attacked smartphone users for accessing applications from unofficial sources rather than trusted ones such as Apple or Google online shops.

Syed Ismail said police statistics recorded from January to September this year showed that losses incurred via SMS or phone calls totalled RM21.8mil.

The hackers target users of Internet banking or phone banking by hacking and abusing the network, including the online purchases of goods.

Online purchases recorded the highest losses of RM14.5mil (1,298 cases) followed by SMS or phone call with RM3.4mil (412 cases), hacking (RM3.3mil via 24 cases) and Internet banking and phone banking with RM590,000 (74 cases). - Bernama

iPhone 5 opens the door for Nokia, Samsung

There's no doubt that the iPhone 5 is going to be a great, fast-selling smartphone, but it's out-innovated by Nokia and Samsung.

  (Credit: Sarah Tew/CNET)

 

News flash: The iPhone 5 is not the end-all and be-all of the smartphone universe, a fact that should thrill Nokia and Samsung alike.

Here's what it is: a strong improvement to the iPhone 4S that offers up a larger screen, 4G LTE speeds, and a terrific camera. The iPhone 5 carries on the goodness that Apple excels at, like iTunes entertainment and cloud storage.

But however good the iPhone 5 is, it lacks the knockout, gasp-inducing feature that Apple followers have come to expect: perhaps double the battery life of any other phone on the market, or an innovative camera feature that lets you drag and drop subjects around the screen, or other far-out concepts come to life.

Instead, we see a lot of catching up: LTE support, panorama mode, and photo capture while a video records, maps with turn-by-turn navigation, and a slightly larger screen with the same pixel density as on the iPhone 4 two generations ago. And it still lacks certain other perks, like NFC, which is useful for mobile payments, and for sharing content from phone to phone.

For the first time in a long time, Apple has given its rivals room to bask in their own innovations.

Samsung's Galaxy Note 2 is the anti-iPhone.

(Credit: Jessica Dolcourt/CNET)

 

The Nokia's Lumia 920 offers wireless charging, for example, a capability it'll pilot in coffee shops and airline lounges. Its camera is literally surrounded by springs, and the screen uses a very smart display filter that could match or even surpass the iPhone 5's display (we have to wait to see them side by side.

Meanwhile, Samsung's Galaxy Note 2 offers up an enormous 5.5-inch screen and a truckload of tricks with its S Pen stylus, and a new camera feature that will compile the best of a handful of group photos, increasing the chances that everyone's smiling. Its phone/tablet hybrid is the antithesis of the smaller iPhone screen.

On the battery front, Motorola's new Motorola Droid Razr Maxx HD can't be beat; it features a powerful 3,300mAh battery that promises 21 hours of talk time to Apple's 8 hours of talk time over 3G on the iPhone 5.

Make no mistake that the iPhone 5 will sell like wildfire and bring delight to Apple fans everywhere -- in fact, I even think it makes for a great universal choice.

Yet its lack of a "gotcha" feature gives shoppers considering other powerful alternatives -- like the intriguing Lumia 920, the larger-than-life Samsung Galaxy Note 2, or even the won't-quit Motorola Droid Razr Maxx HD -- fewer reasons to stick with Apple.

 by Jessica Dolcourt 

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Put an end to patent battle

An early settlement of the dispute between Samsung and Apple would benefit consumers and the global mobile device industry as a whole. 

An Apple Inc. iPad 2 and iPhone 4S smartphone, left, and a Samsung Electronics Co. Galaxy Tab 10.1 tablet computer and Galaxy S III smartphone are arranged for a photograph in Seoul, South Korea, On Tuesday. (Bloomberg)

SEOUL: Samsung Electronics has suffered a crushing defeat in a landmark patent battle against Apple Inc. A US jury last Friday found that the Korean smartphone maker infringed upon a number of patents held by Apple, while the American tech giant did not violate any of its Korean rival’s intellectual properties.

The jury’s judgement is widely criticised here as unfair. But it is highly likely to be upheld by the California court, dealing a serious blow to Samsung, the world’s largest mobile device producer. Samsung accounted for 32.6% of the global market in the second quarter against Apple’s 16.9%.

The nine-member jury ordered Samsung to pay US$1.05bil (RM3.28bil) in damages to Apple. The damages – much larger than expected – could be doubled or even tripled by the judge overseeing the trial, given the jury’s scathing verdict that Samsung “willfully” infringed on Apple’s coveted patents.

Samsung also faces a US sales ban on its mobile devices. Following the trial win, Apple presented to the judge a list of Samsung products it wants barred. Apple identified eight Samsung smartphone and tablet models but did not include Samsung’s new flagships, the Galaxy S3 and the Galaxy Note. Consequently, the sales ban, even if accepted by the court, is unlikely to have a serious impact on Samsung.

The US court’s ruling could also negatively affect patent battles between the two under way in nine countries over four continents. Unfavourable rulings in these countries would pour cold water on Samsung’s ambition to cement its global market leadership.

Furthermore, the jury seriously wounded Samsung’s pride by slamming it as a copycat. This is an insult hard to swallow, as Samsung has worked hard to secure leadership in mobile technology.

Given the high stakes involved, it is only natural that Samsung has decided to file post-verdict motions to overturn what it saw as the jury’s one-sided judgement. It plans to take the case to the court of appeals if its motions are rejected.

This suggests that the patent war will not end any time soon. Samsung is determined to continue the legal battle to make its case that Apple did encroach upon its hard-won patents for mobile technologies.

At the same time, Samsung is seeking to turn the tables in the next round of the battle by utilising its patents for fourth-generation technologies called “long-term evolution.”

Samsung is betting that it would be able to use some of its LTE patents as weapons against its rival because they have not been made open as industry standards. It is wondering how Apple can produce its next-generation model, the iPhone 5, without using its patented LTE technologies.

In light of Samsung’s technological prowess and deep pockets, the company will be able to overcome the grave challenge it is facing now.

For instance, it won’t have much difficulty paying the US$1.05bil (RM3.28bil) damages set by the jury, given that its net profit amounted to US$4.5bil (RM in April-June alone.

Yet Samsung should learn a lesson from the costly patent war. It is imperative for the company to transform itself from a fast follower to a first mover. It needs to go back to the drawing board to make its products truly innovative both in design and functions. It might want to risk a radical design that can differentiate its products from others.

Apple, emboldened by last Friday’s triumph, may be tempted to expand the patent war to collect royalties from other smartphone makers that rely on Google’s Android operating system. Yet it should realise that no company has ever succeeded in establishing market leadership through patent litigations. A company can only become a market leader through competition in the marketplace.

Apple also needs to know that any attempt to drive Android-based smartphone producers into a corner could backfire in the long term, as it will spur their efforts to become more innovative. With their survival at stake, they will be compelled to change the game as they cannot beat Apple at its own game.

In this regard, we urge Apple and Samsung to reach a deal that can benefit both. Apple could set royalties for Samsung at a level that would not undermine the Korean company’s earnings too much. An early settlement of the dispute would also benefit consumers and the global mobile device industry as a whole.

 
By EDITORIAL DESK

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Apple patent claims stifling innovation; Japan court rules in favour of Samsung

Is Apple stifling innovation?

A US jury decision against Samsung and a Japanese court decision for the Korean conglomerate raise questions over the entire patent issue

WOULD anyone have expected the Apple-Samsung case to be decided in favour of Samsung by a US court in a jury verdict and against Apple, which is by now even more American than apple pie? I certainly didn’t.

But there is an appeal on the cards and it is still anyone’s guess if Apple will be allowed to claim such things as shape and “pinch to zoom out” as its right. But if it is, then that’s a big setback for other smartphones.

Samsung, however, scored a victory in a Tokyo court which ruled yesterday that the Korean electronics giant, and supplier to Apple, did not violate any patents. That victory will no doubt raise questions as to how fair the US jury was in making an award in favour of Apple, including US$1bil in damages.

The US decision means eventually consumers there may have to pay more for Apple’s iPhone, iPod and devices because others may not be able to emulate features that may have made their devices a success. That will have repercussions on prices elsewhere as well.

In the motor industry there have been many trends in shape over the years, moving from angular to rounded designs. If some car company had decided to sue every other car manufacturer for a similar look and feel and succeeded, car shapes may have had great difficulty evolving.

But the best manufacturers of cars did not. In fact some of them deliberately did not register safety patents just so that others could use the innovations to increase passenger safety.

If Samsung is said to have infringed on shape, then there are a number of other manufacturers who are in trouble too. Rectangular faces with rounded edges are a natural evolution in the mobile phone industry. Certainly, other manufacturers are going to hope there will be a reversal on appeal.

Apple did not invent the touch screen. Thus, it seems strange that it has a patent to “pinch to zoom” which is basically one way of many ways to use a screen. That’s like patenting a particular method of driving a car!

Apple has already followed up on its US victory, seeking an injunction to prevent Samsung from selling eight of its smartphones in the United States including some in the best-selling Galaxy range.

However, hearing of the injunction will only be in December and some of Samsung’s models may be phased out by then, which offers some consolation for Samsung.

Some US commentators view the case as a proxy war against another US company Google which makes the Android operating system used in Samsung, HTC and other smartphones.

An article in the San Francisco Chronicle says that the late Apple chief executive Steve Jobs was once a friend of Google’s co-founders but considered Google’s move into mobile a betrayal that demanded revenge.

“I’m going to destroy Android, because it’s a stolen product,” he told his biographer Walter Isaacson. “I’m willing to go thermonuclear war on this.”

But despite the nice rhetoric, revenge from the grave it is not. Apple’s strategy seems quite clear cut. Patent everything. Then tie up competitors in court if there is any semblance of product infringement and keep its competitive advantage intact as long as possible.

Reports put its profit margins on its iPhone at as high as 50%, a huge mark-up in a cutthroat market which it has been able to achieve by parlaying an excellent product with some very deft marketing and public relations.

That made it the biggest company in the world. Many would say that the product, however, is not necessarily the best anymore if ever it was, especially since competitors are fast catching up with their own nifty designs and features. And marketing and PR too – Galaxy is getting a name for itself and no doubt the cases around the world will help.

Thus it makes much economic sense for Apple to prolong this by any legal means it can for as long as possible. Does Apple care that it may be stifling innovation, raising costs and hurting consumers in the process?

Probably not. And why should it? It is a company based on the profit motive. But it needs to remember that all publicity is not good publicity and if it gets a reputation as a bully, its entire image and that of its products could change.

American companies can carry this patent thing too far and they have. Recall a few years ago when some of them tried to patent the production of pesticides from neem trees. For thousands of years, extracts from the leaves of the neem have been used for precisely that.

The American jury system cannot but be expected to favour a US icon such as Apple which is seen as brash, innovative and successful, the very image of the US itself. But that’s not going to be the case in the rest of the world. And even in the US, if learned judges make the decisions instead of a jury, the results may well be different.

Really, no one is going to benefit and there may well be detriment, if we allow patents to get the better of us and stifle innovation and hinder the development of new products and services at lower costs.
It would be a travesty of sorts and ironic indeed if Apple is now seen as a technology inhibitor instead. Beware!

A QUESTION OF BUSINESS By P. GUNASEGARAM starbiz@thestar.com.my

P Gunasegaram is an iPhone user but only because the service provider gave such a good deal.

 Japanese court rules for Samsung over Apple

In this Aug. 25, 2011 file photo a lawyer holds an Apple iPad and a Samsung Tablet-PC at a court in Duesseldorf, Germany. The Duesseldorf state court ruled Tuesday, Jan. 31, 2012, that neither the South Korean company‘s Galaxy Tab 10.1 nor the Galaxy Tab 8.9 could be sold in Germany because they were in violation of unfair competition laws. A German appeals court has upheld a decision prohibiting Samsung Electronics Co. from selling two of its tablet computers in Germany, agreeing with Apple Inc. that they too closely resemble the iPad2. (AP)

Samsung wins one battle in the multinational conflict over patent and innovation

By Jeong Nam-ku, Tokyo correspondent

A Japanese court has ruled in favor of Samsung over Apple in a patent lawsuit. In the August 31 verdict, Tamotsu Shoji, the Tokyo District judge, declined Apple’s claim that “8 models of Samsung Galaxy series infringed on Apple’s patents.”

Apple had sued Samsung for infringing on its synchronization of music and other data with remote servers. It asserted that “Samsung’s products use Apple’s technologies of synchronization, which constitutes patent infringement,” and demanded both compensation of 100 million Japanese Yen (around US$1.27 million) and a block on eight Samsung products.

According to Jiji Press, judge Tamotsu stated, “Samsung’s products are technologically distinct from Apple and can’t be considered infringements.”

As a first trial, this does not hold much importance beyond being an indication of what the final verdict might end up being. However, because the verdict ordered a ‘dismissal’ on Apple’s injunction, there is only a slight possibility for an overturn in the final verdict.

Apple has also sued Samsung for infringing on its ‘bounce back (technology that springs back when the document has reached the end)’ patent, a claim that is still ongoing.

This verdict is the first ruling out of the 9 lawsuits Apple and Samsung Electronics have against each other. Samsung also filed lawsuits against Apple in April and October of 2011, arguing that Apple also infringed on 6 of Samsung’s patents.

Samsung and Apple have ongoing lawsuits in different 10 countries. In the US, a judge ruled that Samsung had infringed Apple patents, ordering the Korean electronics giant to pay $1.05 billion in damages.  

Translated by Yoo Hey-rim, Hankyoreh English intern

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Apple's rot starts with its Samsung lawsuit win

Just like Microsoft, Apple's evolution from smart tech company to global uber-brand contains the seeds of its own destruction

The risk for Apple is that it focuses more and more on intellectual property rights – filing patents and litigating – than it does on product innovation. Photograph: Ahn Young-Joon/AP

Apple came close to destroying its business in the late 1980s by pursuing a suit against Microsoft claiming that Windows infringed the look and feel of the Mac desktop metaphor. Apple focused its hopes and business future on this lawsuit, while its market share dwindled. Rather than competing, it litigated. And lost.

Last week, it litigated against Samsung over its iPhone design and won.

The first justifiable conclusion might be that big companies get their way. The second might reasonably be that Apple doesn't change much: its business model remains aggressive self-righteousness. The third is what everybody knows: patent rules and philosophy are all screwed up.

As for the first point, Apple is not just a big company, but the biggest. And it is not just the biggest American company, but the most American company. It has entered a rarefied brand status in which it is now almost synonymous with American virtue: American as Apple. Its good design sense has become a major point of American pride, if not nationalism.

The brand is a national asset. Apple is AT&T in its pre-break-up from; it's GM, in its what's-good-for-General-Motors-is-good-for-the-country stage; it's United Fruit when it made US foreign policy; it's Microsoft when desktop computing was transforming the world.

 Commercial omnipotence

This is about as close to commercial omnipotence as it gets. Its unassailability, its right to be preternaturally aggressive, is built into its share price. We believe in Apple. So let us briefly consider the chance for a Korean company defending itself against (or, perish the thought, challenging) the greatest American company of the age in the eyes of an American jury.

And then, there's the self-righteousness. Apple is one of the most aggressive intellectual property litigators of all time. Its major moves have not been about protecting precise technical innovations, but about claiming the much softer zone of look and feel.

It sues for brand rather than engineering. It has pioneered a new modern sensibility: taste is what's most valuable; identity is king. It's sued about the lower case "i"; it's sued about the word "pod"; it's sued New York City over the "big Apple"; it's sued over using the words "app store".

This fierce defensiveness might be rightly understood in a psychological sense: Apple itself is based on stolen iconography. There was first the Beatle's Apple and there was Xerox PARC's desktop design.

Apple's self-righteousness masks its guilt. (It may be sheepish, too, about being more of a marketing organization than a technology company.) What's more, it knows better than anybody that if you relax your vigilance, somebody can easily walk off with what you've done – and improve it.

And then, in the algebra of Samsung's loss and Apple's victory, there's patent hell. Or absurdity.

 System of litigation

Patents are, arguably, no longer a system of protection; they are a system of litigation. Great numbers of patents are now filed, in an over-burdened system, to protect not innovations but the right to litigate over innovations. Indeed, any patent of value will ultimately be litigated.

What's more, as the system has become ever more over-taxed, as technology itself has become more complex, the ill-equipped and under-trained bureaucracy has increasingly taken to giving patents to wide-ranging abstractions.

Design concepts, behavior adjustments, and new approaches to problem solving are all patentable innovations. The system itself assumes that litigation is the check on the system. Which means, fundamentally, that the litigant with the most resources and greatest status wins.

But let us not argue the case that all this quite obviously impedes innovation and is part of a new unreal property land grab – not about technology at all, but about intellectual property: an effort to privatize much of what was once understood to be shared and public (indeed, not ownable, like the shape of the iPhone). But rather, for a moment, let's look at this as a form of hubris that has inevitable consequences.

The Apple that has won against Samsung is the same Apple that lost against Microsoft. In other words, it is the kind of company that, through sheer willfulness, discipline, and perfectionism, can achieve brand hegemony of a singular type. But it is, too, the kind of company – the exact sort of company – that becomes, perhaps inevitably becomes, the bete noire of consumerists, regulators and, of course, most of all, its competitors.

This is the story between the lines of its great victory and its further share price surge. On the one hand, there is this seemingly golden company. On the other hand, there is anybody with any sense of history knowing this is going to end badly.
  
American capitalism

Companies that acquire the nation's imprimatur often, if not invariably, over-reach. It is a characteristic of American capitalism: the price of getting really big and overbearing is that you incur an inverse reaction. In the early 1990s, an ambitious department of justice (a Republican administration DOJ at that) commenced its assault on Microsoft.

For better or worse, by the time the feds were finished, the company, with its rotten operating system, besieged and beleaguered, had become just one of many not-very-adept players in the space – an unimaginable outcome if you remember the once God-like power and scorched-earth wrath of Microsoft.

Apple, and its rotten phone, have a ways to go. But karma should not be underestimated as a factor in this game.

• • By Michael Wolff
  • guardian.co.uk

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US Stocks dominate; Korean share drops after US's ruling on Apple-Samsung patent wars

US ascends in biggest stocks as Google, Apple oust Gazprom

Shares of Apple have hit new record highs after the company won its patent lawsuit against Samsung, but overall stocks traded mixed.

• Image Credit: AP
• Apple Inc., International Business Machines Corp., Wells Fargo & Co. and four more US companies joined the top 20 since stocks peaked in 2007, bringing the total to 14, according to data compiled by Bloomberg

New York: American stocks are dominating global equities by the most in a decade, taking a majority of the spots in a ranking of the 20 biggest companies, after earnings rose faster than the rest of the world as the global economy rebounded.

Apple Inc., International Business Machines Corp., Wells Fargo & Co. and four more US companies joined the top 20 since stocks peaked in 2007, bringing the total to 14, according to data compiled by Bloomberg. They replaced Moscow-based Gazprom OAO, China Petroleum & Chemical Corp. in Beijing, Petroleo Brasileiro SA of Rio de Janeiro and six others from Europe and Asia. Of the nine added, only BHP Billiton Ltd. and Nestle SA are based outside the US.

More US corporations are represented than any time since 2003 after 10 quarters of economic expansion and profit growth lifted the Standard & Poor’s 500 Index 109 per cent since shares bottomed in March 2009. The shift reflects volatility in emerging markets and shows how innovation builds value in the US.

“The US is just the best place on the planet to have a great idea and turn it into a big business,” according to Michael Shaoul, chairman of New York-based Marketfield Asset Management, which oversees $2.7 billion (Dh9.9 billion).

“There’s another reason for this list to have shifted and that is the falling of prior darlings,” Shaoul said. “A lot of the ones which have fallen are energy and emerging-market related.”

Reasons for strength

American companies are gaining strength in part because of Europe’s sovereign debt crisis. While the S&P 500 fell 0.5 per cent last week to 1,411.13, retreating from a four-year high, amid concern European leaders will fail to preserve the 17-nation currency union, the Euro Stoxx 50 Index slid 1.5 per cent. S&P 500 futures added 0.1 per cent to 1,410.6 at 8.52am in London on Monday.

Computer and software makers became the top industry in the S&P 500, overtaking financial companies, as Apple and IBM joined Google Inc. and Microsoft Corp. among the biggest stocks. The last time a non-US technology producer made the global ranking was in 2001, when Finland-based Nokia Oyj was the world’s largest mobile phone maker. Nokia’s market value has fallen by 92 per cent since Apple introduced the iPhone in 2007.

The Cupertino, California-based maker of iPad computers last week became the most valuable US company ever as the stock rose to $668.87 on August 22, giving the company a value of $627 billion. Apple, which approached bankruptcy in 1997, has jumped more than 80-fold in the past decade.

IBM’s market value more than doubled over the decade as the company shifted its strategy toward more profitable software sales and away from hardware and consulting. The New York-based company, with a market capitalisation of $226 billion, closed the gap with Microsoft, valued at $256.2 billion, to become the No. 3 technology maker and the world’s seventh-biggest company.

Microsoft, based in Redmond, Washington, was worth four times as much as IBM in 1999. Mountain View, California-based Google, owner of the world’s most popular search engine, is valued at $222.6 billion.

No match to Apple, Google

“There are not a lot of other companies that can compete with the Googles and the Apples of the world,” Jeffrey Saut, chief investment strategist at Raymond James & Associates in St. Petersburg, Florida, said. “We have probably the most cutting-edge companies in the technology space that exist today. Who can match Apple? I can’t think of anybody.”

Computer and software makers represent 20 per cent of the S&P 500. The industry’s weighting outside the US is 4 per cent, as measured by the MSCI World ex-US Index.

Profit growth drove the US gains. The 14 biggest US companies earned $248.4 billion in the last 12 months, more than double the total made by the 67 companies in Brazil’s Bovespa Index. Their market value reached $3.57 trillion, about the size of Germany’s 2011 gross domestic product.

Earnings at the seven newly added American companies surged 40 per cent during the past four years, while income for the 13 non-US firms that made the 2007 list rose 6 per cent, data compiled by Bloomberg show.

The ranking reflects the US economy, where growth climbed back toward pre-2008 levels faster than other countries. Gross domestic product is forecast to gain 2.2 per cent this year, according to the median estimate of 78 economists surveyed by Bloomberg. That compares with an average of 2.6 per cent between 2002 and 2007, before the credit crisis, the data show.

Growth declines elsewhere

China is projected to expand by 8.1 per cent, compared with its mean rate of 11.2 per cent before the global recession. Brazil’s GDP may increase 1.9 per cent, down from an average of 3.8 per cent. Russia may grow by 3.8 per cent, next to 7.1 per cent in the five years before the credit crisis.

“People perceive not only better growth for the US, but also less risk,” Chris Leavy, the chief investment officer of fundamental equities at New York-based BlackRock Inc., which oversees $3.56 trillion as the world’s biggest money manager, said in an August 22 interview.

Investors are demanding more profit to reward companies with higher stock prices than before the credit crisis shattered confidence in equities. The average capitalisation of the largest 20 companies shrunk 17 per cent to $242.5 billion since 2007 even as profits surged almost fourfold to $18.8 billion, data compiled by Bloomberg show.

The biggest companies, dominated in 2007 by commodity explorers and enterprises controlled by China’s government, traded at an average price-earnings ratio of 57.6, the data show. Today, after the addition of two American technology developers and a California bank, the average valuation is 12.9, according to the data.

“It’s so commonplace in this country to vilify corporations, but the truth is the American corporate structure has worked very well,” David Kelly, chief market strategist at JPMorgan Funds in New York, said in an August 22 phone interview. His firm oversees about $348 billion. “There are other countries which are doing very well economically, but don’t do as good a job as inventing and reinventing themselves.”

The S&P 500 trailed the rest of the world in the previous bull market as accelerating growth in China boosted demand for commodities from Brazil to Russia. The index rose 99 per cent during the five-year rally that ended in October 2007, lagging behind a 187 per cent gain by the MSCI World ex-US Index and a 416 per cent surge in an MSCI gauge tracking 21 emerging markets. - Bloomberg

Samsung share price drops on Apple patent ruling

How South Koreans view Samsung ruling

STORY HIGHLIGHTS

• NEW The share price of Samsung Electronics dropped nearly 7.5% in trading Monday
• Comes after a California jury awarded Apple $1.05 billion in a patent dispute with Samsung
• The tumble erased about $12 billion from the South Korean electronics giant's market value

(CNN) -- The share price of Samsung Electronics dropped nearly 7.5% in trading Monday as investors had their first opportunity to react to the more than $1 billion decision against the Korean electronics giant by a California jury for infringing on Apple patents.

Samsung dropped 6.3% at the open of South Korea's Kospi index and finished the day down 7.45%, after dropping as much as 7.7%. The tumble erased about $12 billion from the company's market value Monday.

Samsung is planning to appeal Friday's decision of a U.S. federal jury which awarded Apple $1.05 billion for copying the look and feel of iPhones and iPad design. The jury rejected Samsung's counterclaims against Apple.

A senior Samsung executive told the Korea Times the decision was "absolutely the worst scenario for us" as he was heading into an emergency meeting at the company's Seoul headquarters on Sunday.

The decision could lead to the prohibition of sales in the U.S. of Samsung smarphones and computer tablets found to have violated Apple's patents. A hearing on the matter is scheduled for September 20.

Apple vs. Samsung: Tale of two countries

CNNMoney: What the Apple-Samsung verdict means for your smartphone

"As far as the money damages are concerned, (Samsung) will make that up in the long run. The bigger issue at the moment them having to come up with new and unique designs appealing to the customer base," said Christopher Carani, chairman of the design rights committee of the American Bar Association.

"It will lead to fewer choices, less innovation, and potentially higher prices," Samsung said in a written statement after Friday's decision. "It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies."

Apple, meanwhile, praised the court for "sending a loud and clear message that stealing isn't right."

"The mountain of evidence presented during the trial showed that Samsung's copying went far deeper than even we knew," the company said in a statement.

A nine-person jury spent just two and a half days puzzling out its final verdict, with weeks of notes and memories of testimony, 109 pages of jury instructions, and boxes of evidence including a collection of contested smartphones and tablets as their guide.

The jury award shows the growing importance of design for electronics makers. In 2001, Apple and Samsung were awarded 10 and eight U.S. design patents, respectively. This year, Apple could have as many as 333 design patents approved, while Samsung could have as many as 500, Carani said.

"Central to the U.S. case and at its very core was design rights, the way things look, and that's really where the large amount of this billion-dollar damages judgment comes from," Carani said.

The lawsuit is the largest yet in the ongoing worldwide patent brawl between the two companies, which itself is just one battle in Apple's war against Google's Android mobile operating system. On Friday, a South Korean court found that both parties had infringed on each other's patents, banning the sale of the iPhone 3GS, iPhone 4, two iPad models and Samsung's Galaxy S2.

The Korean court ordered Apple to pay Samsung $35,000 and Samsung to pay Apple $22,000.

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Apple wins $1bn in US while Samsung wins in Korea; it may reshape the free Google Android system

Apple won more than $1 billion in a massive victory Friday over South Korean giant Samsung, in one of the biggest patent cases in decades—a verdict that could have huge market repercussions.

A jury in San Jose, California rejected Samsung's counterclaims against Apple, according to media reports—a big win for the Silicon Valley giant, which had claimed its iconic iPhone and iPad had been illegally copied.

Samsung Electronics' Galaxy S III, right, and Apple's iPhone 4S are displayed at a mobile phone shop in Seoul, South Korea. (Ahn Young-joon/Associated Press)

The jury, which had examined infringement claims and counter-claims by Apple and Samsung, ruled the South Korean electronics giant had infringed on a number of patents, the tech websites Cnet and The Verge said in live courtroom blogs.

The verdict affects patents on a range of Samsung products including some of its popular Galaxy smartphones and its Galaxy 10 tablet—devices alleged to have been copied from the iPhone and iPad.

"This is a huge, crushing win for Apple," said Brian Love, a professor of patent law at Santa Clara University.

"All of its patents were held valid, and all but one were held to be infringed by most or all accused Samsung products. Even better for the company, five of the seven patents were held to be willfully infringed by Samsung."

Love said this means that Judge Lucy Koh "now has the discretion to triple Apple's damages award, which is already a monstrous and unprecedented $1.051 billion."

Technology analyst Jeff Kagan said of the verdict: "This is a great day for Apple. And it will turn into a very expensive day for Samsung."

Kagan said it was not immediately clear if Samsung would be able to continue to use the technology and pay Apple for the right to do so, or if they must pull their devices and redesign them.

In any case, the verdict in the case—one of several pending in global courts—is likely to have massive repercussions in the hottest part of the technology sector, smartphones and tablets.

Even a delay in sales could endanger Samsung's position in the US market, where it is currently the top seller of smartphones.

A survey by research firm IDC showed Samsung shipped 50.2 million smartphones globally in the April-June period, while Apple sold 26 million iPhones. IDC said Samsung held 32.6 percent of the market to 16.9 percent for Apple.

The jury reached its verdict after deliberating for less than three days, examining claims of infringement by both sides. The trial heard evidence during 10 days over a three-week period.

Samsung had steadfastly denied the charges by Apple, claiming it developed its devices independently, and countersued in the case, seeking more than $400 million for infringement on its wireless patents.

The verdict came the same day a South Korean court ruled Apple and Samsung infringed on each other's patents on mobile devices, awarding damages to both technology giants and imposing a partial ban on product sales in South Korea.

The court banned sales in South Korea of Apple's iPhone 4 and iPad 2, as well as Samsung's Galaxy S and Galaxy SII among other products. (c) 2012 AFP

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Apple wins U.S. patent battle against Samsung

 

 Apple headquarters in Cupertino, Calif. A U.S. jury has ruled for Apple in its huge smartphone patent infringement case involving Samsung. (Paul Sakuma/Associated Press)

After a year of scorched-earth litigation, a jury decided Friday that Samsung ripped off the innovative technology used by Apple to create its revolutionary iPhone and iPad.

The jury ordered Samsung to pay Apple $1.05 billion. An appeal is expected.

Apple Inc. filed its patent infringement lawsuit in April 2011 and engaged legions of the country's highest-paid patent lawyers to demand $2.5 billion from its top smartphone competitor. Samsung Electronics Co. fired back with its own lawsuit seeking $399 million.

The verdict, however, belonged to Apple, as the jury rejected all Samsung's claims against Apple. Jurors also decided against some of Apple's claims involving the two dozen Samsung devices at issue, declining to award the full $2.5 billion Apple demanded.

However, the jury found that several Samsung products illegally used such Apple creations as the "bounce-back" feature when a user scrolls to an end image, and the ability to zoom text with a tap of a finger.

As part of its lawsuit, Apple also demanded that Samsung pull its most popular cellphones and computer tablets from the U.S. market. A judge was expected to make that ruling at a later time.

After the verdicts were read, the judge sent the jury back to deliberate further on two inconsistencies involving about $2.5 million in damages awarded to Apple based on products jurors found didn't infringe Apple's patents. Those deliberations were continuing.

'Crisis of design'

During closing arguments at the trial, Apple attorney Harold McElhinny claimed Samsung was having a "crisis of design" after the 2007 launch of the iPhone, and executives with the South Korean company were determined to illegally cash in on the success of the revolutionary device.

Samsung's lawyers countered that it was simply and legally giving consumers what they want: Smart phones with big screens. They said Samsung didn't violate any of Apple's patents and further alleged innovations claimed by Apple were actually created by other companies.

'Today's verdict should not be viewed as a win for Apple, but as a loss for the American consumer. It will lead to fewer choices, less innovation, and potentially higher prices.'—Samsung statement

Samsung responded to the verdict in a statement issued from its Seoul headquarters, saying it was "unfortunate that patent law can be manipulated to give one company a monopoly."

"Today's verdict should not be viewed as a win for Apple, but as a loss for the American consumer. It will lead to fewer choices, less innovation, and potentially higher prices," Samsung said.

Samsung has emerged as one of Apple's biggest rivals and has overtaken Apple as the leading smartphone maker. Samsung's Galaxy line of phones run on Android, a mobile operating system that Google Inc. has given out for free to Samsung and other phone makers.

Samsung conceded that Apple makes great products but said it doesn't have a monopoly on the design of rectangle phones with rounded corners that it claimed it created.

'Thermonuclear war' on Android

Google entered the smartphone market while its then-CEO Eric Schmidt was on Apple's board, infuriating Apple co-founder Steve Jobs, who considered Android to be a blatant rip off of the iPhone's innovations.

After shoving Schmidt off Apple's board, Jobs vowed that Apple would resort to "thermonuclear war" to destroy Android and its allies.

The trial came after each side filed a blizzard of legal motions and refused advisories by U.S. District Judge Lucy Koh to settle the dispute out of court. Deliberations by the jury of seven men and two women began Wednesday.

Apple and Samsung combined account for more than half of global smartphone sales. Samsung has sold 22.7 million smartphones and tablets that Apple claimed uses its technology. McElhinny said those devices accounted for $8.16 billion in sales since June 2010.

Identical look and feel

From the beginning, legal experts and Wall Street analysts viewed Samsung as the underdog in the case. Apple's headquarters is a mere 16 kilometres from the San Jose courthouse, and jurors were picked from the heart of Silicon Valley where Jobs is a revered technological pioneer.

Samsung Electronics' Galaxy S III, right, and Apple's iPhone 4S are displayed at a mobile phone shop in Seoul, South Korea. (Ahn Young-joon/Associated Press)

While the legal and technological issues were complex, patent expert Alexander I. Poltorak previously said the case would likely boil down to whether jurors believed Samsung's products look and feel almost identical to Apple's iPhone and iPad.

To overcome that challenge at trial, Samsung's lawyers argued that many of Apple's claims of innovation were either obvious concepts or ideas stolen from Sony Corp. and others. Experts called that line of argument a high-risk strategy because of Apple's reputation as an innovator.

Apple's lawyers argued there is almost no difference between Samsung products and those of Apple, and presented internal Samsung documents they said showed it copied Apple designs. Samsung lawyers insisted that several other companies and inventors had previously developed much of the Apple technology at issue.

Global patent war

The U.S. trial is just the latest skirmish between the two tech giants over product designs. Apple and Samsung have filed similar lawsuits in eight other countries, including South Korea, Germany, Japan, Italy, the Netherlands, Britain, France and Australia.

• Samsung wins Korean battle in Apple patent war

Samsung won a home court ruling earlier Friday in the global patent battle against Apple. Judges in Seoul said Samsung didn't copy the look and feel of the iPhone and ruled that Apple infringed on Samsung's wireless technology.

However, the judges also said Samsung violated Apple's technology behind the feature that causes a screen to bounce back when a user scrolls to an end image. Both sides were ordered to pay limited damages.

The Seoul ruling was a rare victory for Samsung in its arguments that Apple has infringed on its wireless technology patents. Samsung's claims have previously been shot down by courts in Europe, where judges have ruled that Samsung patents were part of industry standards that must be licensed under fair terms to competitors.

The U.S. case is one of some 50 lawsuits among myriad telecommunications companies jockeying for position in the burgeoning $219 billion market for computer tablets and smartphones. - The Associated Press

Apple patent win may reshape sector

WASHINGTON — Apple's decisive victory in a landmark US patent case against Samsung could reshape the hot sector for mobile devices and slow the momentum of Google and its Android system, analysts say.

Apple won more than $1 billion in the case Friday, after a California jury found the South Korean electronics giant infringed on dozens of patents held by the iPhone and iPad maker.

Although Google was not a party in the case, it makes the Android operating system which was central to the case -- a system which Apple's late co-founder Steve Jobs called a "stolen" product.

Apple has been battling as Samsung and other manufacturers of the free Android system eat away at its market share in the sizzling market for smartphones and tablet computers.

"I think this will force a reset on Android products as they are reengineered to get around Apple's patents," said Rob Enderle, a technology analyst and consultant with the Enderle Group.

But Enderle said other companies may benefit from the decision, including Microsoft, which has been lagging in the mobile sector, and Blackberry maker Research in Motion, which has been hit hardest by the rise of Android devices.

The court ruling, said Enderle, "should provide a stronger opportunity for both of Microsoft's new platforms -- Windows 8 and Windows Phone 8 -- because they come with indemnification against Apple, suddenly making them far safer and possibly a faster way to get product to market."

The decision also "will make RIM far more attractive as an acquisition because RIM's patents are thought to be strong enough to hold off Apple," Enderle said.

"Both Samsung and Google may make a play for the company, and both Microsoft and Apple may move to block them."

In recent months, Android devices have grabbed more than 50 percent of the US smartphone market to around 30 percent for Apple, while RIM's shares have slid to around 12 percent.

The patents at play include software such as the "bounceback" feature for smartphone users when scrolling and pinch-zooming, which are featured on Android devices.

Florian Mueller, a consultant who follows patent and copyright issues, said Friday's court ruling was "a huge breakthrough."

"The jury essentially concluded that Samsung is a reckless copycat and, since some of the infringement is Google's responsibility, basically agreed with Steve Jobs's claim that Android is a stolen product," he wrote on his blog.

Still, a lot hinges on what happens next in court, with the case likely to be tied up in appeal for some time.

Judge Lucy Koh set a September 20 hearing where she will consider whether to overturn or modify the jury verdict, whether to impose "punitive" damages which would triple the award and whether to issue injunctions against Samsung.

A critical factor will be whether Apple will be able to obtain a permanent injunction, or halt in sales on infringing Samsung devices, and whether this would be enforced during the appeal.

Dennis Crouch, a University of Missouri patent law specialist, said the judge will have broad discretion.

"Some courts have issued broad injunctions that essentially say 'stop infringing the patent,' others issue much more narrow orders directed only toward the particular products that are adjudged to infringe," Crouch said on his blog.

"The reality is that Samsung has been planning for the likelihood of injunctive relief and is surely ready to stop selling any of the infringing products and replace those products with ones that at least have not yet been adjudged as infringing."

This could lead to more legal battles, since Apple has another lawsuit pending on Samsung's newer handheld devices.

Samsung has pledged to keep fighting the case, and said that if it stands "it will lead to fewer choices, less innovation, and potentially higher prices."

Samsung called it "unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies."

Analysts say that aside from Samsung, Google could be the big loser, especially if Apple pursues its litigation against other manufacturers.

"Google cannot stop Apple. It is now on the run and will have to scramble to make software changes to Android," Mueller said.

"In a few years, the San Jose jury verdict may -- I repeat, MAY -- be remembered as the tipping point that sent Android on a downward spiral."

By Rob Lever (AFP)

Samsung wins Korean battle in Apple patent war

South Korean electronics giant Samsung has earned a rare victory in its global court battle with rival Apple. (Bruce Bennett/Getty Images )

 

 Samsung wins 1st round2:51

South Korea's Samsung won a home court ruling in its global smartphone battle against Apple on Friday when Seoul judges said the company didn't copy the look and feel of the U.S. company's iPhone, and that Apple infringed on Samsung's wireless technology.

However, in a split decision on patents, the panel also said Samsung violated Apple technology behind the bounce-back feature when scrolling on touch screens, and ordered both sides to pay limited damages.

The Seoul Central District Court ruling called for a partial ban on sales of products including iPads and smartphones from both companies, though the verdict did not affect the latest-generation phones — Apple's iPhone 4S or Samsung's Galaxy S3.

The ruling affects only the South Korean market, and is part of a larger, epic struggle over patents and innovation unfolding in nine countries. The biggest stakes are in the U.S., where Apple is suing Samsung for $2.5 billion over allegations it has created illegal knockoffs of iPhones and iPads.

Wide-ranging dispute

The Seoul ruling was a rare victory for Samsung in its arguments that Apple has infringed on its wireless technology patents, which previously have been shot down by courts in Europe where judges have ruled that they are part of industry standards that must be licensed under fair terms to competitors.

"This is basically Samsung's victory on its home territory," said patent attorney Jeong Woo-sung. "Out of nine countries, Samsung got the ruling that it wanted for the first time in South Korea."

The ruling ordered Apple to remove the iPhone 3GS, iPhone 4, iPad 1 and iPad 2 from store shelves in South Korea, ruling that the products infringed on two of Samsung's five disputed patents, including those for telecommunications technology.

The court also denied Apple's claim that Samsung had illegally copied its design, ruling that similar rectangular screens with rounded corners had existed in products before the iPhone and iPad.

"Based on the similarity in these features, it is not possible to assert that the two designs are similar," the court said in a ruling issued in Korean that was translated into English by The Associated Press. It also said individual icons do not appear similar to the icons Apple used in the iPhone.

But the court ruled that Suwon, South Korea-based Samsung had infringed on one of Apple's patents on the feature that causes a screen to bounce back when a user scrolls to an end image. The court banned sales of Samsung products using the technology, including the Galaxy S2, in South Korea.

Products removed

Court spokesman Kim Mun-sung said the court's ruling was to take effect immediately, although companies often request that sanctions be suspended while they evaluate their legal options.

Nam Ki-yung, a spokesman for Samsung, said the company welcomed the ruling. "Today's ruling also affirmed our position that one single company cannot monopolize generic design features," he said.

Apple did not respond to multiple calls seeking comment.

The court also ordered each company to pay monetary compensation to its competitor. Samsung must pay Apple 25 million won ($22,000) while Apple must pay its rival 40 million won.

South Korea is not a big market for Apple, and the ruling is not likely to have a big impact on jury deliberations in the U.S.

However, some industry watchers expressed concern over the South Korean ruling to protect industry standard patents. They say the decision could invite a trade war by giving Samsung and fellow South Korean company LG — both industry standard patent holders — more room to block rivals' entrance into South Korea if they don't agree to licensing terms.

"It would mean that foreign companies would either have to bow to Samsung's and LG's demands ... or stop selling in Korea," said Florian Mueller, a patent expert in Munich, Germany who has been closely following the case.

Courts in Europe, including Netherlands, France, Italy and Germany have rejected similar claims by Samsung that Apple violated its wireless patents, with judges arguing that the patents have become part of industry standards. Standard-essential patents are a crucial technology for new players to make products compatible with the rest of the market and must be licensed under fair and reasonable terms.

Case continues elsewhere

Europe's anti-trust regulator launched an investigation earlier this year into whether Samsung was failing to license those patents under fair and reasonable terms.

In Friday's ruling, the South Korean court said Samsung did not abuse its market power as an industry standard patent holder.

Apple filed suit against Samsung in San Diego, California, in April 2011, alleging that some of the South Korean company's smartphones and computer tablets are illegal knockoffs of Apple's iPhone and iPad. Samsung denies the allegations and argues that all companies in the cutthroat phone industry mimic each other's successes without crossing the legal line.

Cupertino, California-based Apple is suing Samsung for $2.5 billion and demanding that the court pull its most popular smartphones and computer tablets from the U.S. market, making the case one of the biggest technology disputes in history.

Jury deliberations in San Diego began Wednesday after three weeks of testimony. The case went to the jury after last-minute talks between the companies' chief executives failed to resolve the dispute.

Shortly after Apple filed its suit in the U.S., Samsung filed a complaint in South Korea against Apple for allegedly breaching its telecommunications patents.

The battle is all the more complex as Apple and Samsung are not only competitors in the fast-growing global market for smartphones and tablet computers, but also have a close business relationship.

Samsung, the world's biggest manufacturer of memory chips and liquid crystal displays, supplies some of the key components that go into Apple products, including mobile chips that work as a brain of the iPhone and the iPad.

The South Korean firm overtook Apple in less than three years in smartphone markets. In the second quarter of this year, Samsung sold 50.2 million units of smartphones, nearly twice as much as Apple's 26 million units, according to IDC. - The Associated Press