Kirsty Dorsey: Can Apple still cut it after Jobs?

AS APPLE fans queued to pay tribute to Steve Jobs last week, some leaving floral tributes outside stores around the world, a temporary armistice broke out in the bitter battle between the technology giant and Samsung, its Korean competitor.

Samsung chief GS Choi put aside any bad feelings and joined the chorus of business leaders talking up Jobs’ remarkable achievements during his lifetime, saying that his “innovative spirit and remarkable accomplishments will forever be remembered by people around the world”.

Although they did not cite Jobs’ death as the reason, Samsung and Google also on Friday announced a delay to the launch of their much anticipated smartphone Nexus Prime, which is expected to pose the biggest threat so far to Apple’s iPhone. The phone was due to be unveiled at a trade show on Tuesday.

Despite last week’s events, however, analysts are not expecting the peace to last for long, and with Apple seemingly weakened by the loss of its revered leader, there is mounting speculation about whether it can retain its position at the top of the gadget league.

Could the balance of power be poised to shift towards rivals such as Samsung, Google, Amazon and Microsoft as they introduce their own sophisticated models into the smartphone and tablet markets?

The deterioration in relations between Apple and Samsung kicked off in April, when Apple filed the first of more than 20 lawsuits across nine countries.

The ferocity of the war was turned up early last week when Samsung seized upon the tepid response to the launch of the latest iPhone to launch its latest offensive. Just hours after the iPhone 4S was unveiled on Tuesday, Samsung unleashed a blizzard of statistics detailing how its own Galaxy S II was superior to the latest Apple product.

Samsung then further upped the pressure with the announcement that it would add to the legal tally by filing preliminary injunctions to block iPhone 4S sales in France and Italy, with similar moves likely in other countries. Apple, Samsung claimed, was “flagrantly violating” its intellectual property rights and taking a “free ride on our technology”.

The tone turned decidedly deferential less than 24 hours later when it was announced that Jobs had finally succumbed to the pancreatic cancer that had dogged his health for the past several years.

Choi’s tribute to Jobs drew both praise and criticism as message boards overflowed with commentary, showing just how far the acrimony between the two companies has trickled down to ordinary users. Some described the statement from the Korean firm as “classy”, but die-hard Apple adherents were far harsher.

“Korean crocodile tears,” said one “If they really are sad about Steve’s death, they should stop ripping others off and pay up for the Apple technology they have stolen over the years.”

Samsung has yet to show any inclination towards concessions on that particular front. Though the Nexus Prime launch has been delayed, a number of key legal decisions expected from around the globe this week are likely to re-ignite the conflict.

“The death of Steve Jobs will not have any impact at all, and I don’t think anybody would expect it to because his death doesn’t change any of the issues they are arguing about,” says Laurence Ward, partner and head of intellectual property at Dundas & Wilson. “The whole industry is battling for territory, but the Apple-Samsung thing is particularly interesting. There are big, big stakes involved in this financially.”

The size of the prize on offer was thrown into sharp relief on Friday, when Samsung reported forecast-beating third quarter figures despite a slump in the chip and display businesses that rely on sales of items such as computers and televisions. Although Apple has secured some key legal victories to date, the protracted dispute has so far failed to slow Samsung’s smartphone business in its charge to unseat its rival from the top of the market.

The battle, most experts agree, has little to do with hardware or the rights and wrongs of patent law. Intellectual property rights have become the lever of choice to boost competitive advantage across the rapidly-expanding wireless industry, and are increasingly being used to hamper sales by rivals.

In addition to Apple and Samsung, HTC, Motorola, Nokia and Google are all currently involved in one or more patent lawsuits that could result in settlements worth billions of dollars.

How the bitter dispute might unfold will become clearer in the coming days, with key legal decisions expected in Australia, the Netherlands and the US later this week.

In California, Apple has asked the US District Court to issue an injunction that would prevent Samsung from selling some of its Galaxy line of mobile phones and tablets, which Apple claims have been “slavishly” copied from its own products.

A hearing on that injunction request is scheduled for Thursday, to be followed on Friday by a ruling in the Netherlands, where Samsung has accused Apple of using without permission some of its technical patents that govern how devices connect to, and operate across, a telecom network. The Dutch judge’s decision on whether Samsung has a case comes on the same day that iPhone 4S is due to go on sale in Europe.

Ward at Dundas & Wilson says the case in the Netherlands will be particularly relevant for Europe. Though patent law is still judged on a country-by-country basis, the Dutch court is highly regarded as a benchmark jurisdiction in such matters.

Should Samsung succeed, this would call into question a precedent by which any intellectual property regarded as “industry standard” must be licensed to anyone operating in that field on fair, reasonable and non-discriminatory terms. Without such arrangements, mobile phones would be unable to connect with the network or each other.

On the other hand, Apple’s decision last week to reject a possible peace offering in the Australian courts seems to indicate it is confident in its position. Apple is seeking a temporary ban on sales of Galaxy 10.1 tablets in that country, where Samsung had hoped to in August.

A decision on the temporary ban, which comes ahead of a final hearing, is expected sometime this week.

Throughout his career, Jobs was always particularly passionate about enforcing Apple’s intellectual property rights. There seems no doubt that his hand-picked successor as chief executive, Tim Cook, will continue down the same line.

Jan Dawson, chief telecoms analyst at Ovum, believes Apple will continue to perform well in the short-term as the company will follow strategies laid out by Jobs as though the founding chairman is still there. Longer-term, it remains to be seen whether the company can, without Jobs’ “sterling eye”, execute the precision needed to make a success of the single “hero” products which Jobs favoured.