With the first win by Apple of Samsung in the last week the question has to be asked, is this good for Apple? In a year that is seeing increasing pressure on the company, while they maintain record profits, is the worm going to turn? Apple’s PR is not in a great position at the moment and they need more than a legal win to maintain their dominant position long-term.

The blogging world exploded in the last few days with the news that Apple had scored its first win in the Patent war against Samsung. Samsung is set to appeal, Apple is awarded billions in change and rumour is they will not only push for more cash, they’ll ask for Samsung to be stop being sold in the USA.

The technology bloggers have decried this as a deep blow for innovation. This is true. Not only will this slow down smartphone and device development for months while companies examine their own liability in light of the verdict, it sends a strong signal to the market that the guy with the deepest pockets will win eventually. Apple is being slammed as an innovator killer as opposed to the innovation revolutionary of the past. This is a widespread theme spreading through the technology world.

I had two family members toss-up recently between the iPhone 4s and the Samsung Galaxy III. They opted for the Samsung. Having had a bit of time to play with the device it strikes me that unless Apple comes up with something equally revolutionary with the iPhone 5, they are going to suffer a mass exodus to Samsung.

The device is bigger, but not so big as to be a nuisance. The screen is brighter and the equal of Apple’s. The device itself is massively over-powered for the application set it can currently run, that means that it is going to have a good long life. While the app list for Android is not as extensive as Apple, that will change over time. The device does everything you want and more and the interface, while different from Apple, is intuitive and easy to use.

Personally, my contract comes up a the end of September and unless Apple comes up with some very new and exciting stuff, including a much bigger screen, I think I will be swapping.

Apple is under pressure in other areas with a range of PR mishaps over the past few months also influencing their social capital.

It is no longer acceptable for the western consumer to buy product that is created in less than ideal labour conditions. With Apple, this problem just won’t go away. The issues with Foxconn just keep coming.

The New York Times has been an outspoken source reporting the conditions at Foxconn, so much so, that Apple was “forced to respond”.

In an article entitled “In China, Human costs are built into an iPad” it notes that:

“In the last decade, Apple has become one of the mightiest, richest and most successful companies in the world, in part by mastering global manufacturing. Apple and its high-technology peers — as well as dozens of other American industries — have achieved a pace of innovation nearly unmatched in modern history.       

However, the workers assembling iPhones, iPads and other devices often labor in harsh conditions, according to employees inside those plants, worker advocates and documents published by companies themselves. Problems are as varied as onerous work environments and serious — sometimes deadly — safety problems.       

Employees work excessive overtime, in some cases seven days a week, and live in crowded dorms. Some say they stand so long that their legs swell until they can hardly walk. Under-age workers have helped build Apple’s products, and the company’s suppliers have improperly disposed of hazardous waste and falsified records, according to company reports and advocacy groups that, within China, are often considered reliable, independent monitors.       

More troubling, the groups say, is some suppliers’ disregard for workers’ health. Two years ago, 137 workers at an Apple supplier in eastern China were injured after they were ordered to use a poisonous chemical to clean iPhone screens. Within seven months last year, two explosions at iPad factories, including in Chengdu, killed four people and injured 77. Before those blasts, Apple had been alerted to hazardous conditions inside the Chengdu plant, according to a Chinese group that published that warning.”

An Apple Exec noted that;

“You can either manufacture in comfortable, worker-friendly factories, or you can reinvent the product every year, and make it better and faster and cheaper, which requires factories that seem harsh by American standards,” said a current Apple executive.       

“And right now, customers care more about a new iPhone than working conditions in China.”

Personally, I struggle with that concept. While I want to be able to consume electronics I’m not sure I am comfortable about the cost of it on a human capital level. We probably treat chickens and pigs better in New Zealand in some cases. Will we see a “Freedom Farming” approach to technology in the future? Oh, before I get the comments, I am quite aware that this is not just an Apple issue. Large technology companies all over the world are doing the same with the same results. What is different here is that Apple has managed to become the poster boy for the problems.

As well as the “death of innovation” theme that is appearing after the Apple verdict, a lot of technologists are also commenting that this court loss for Samsung also represents a significant win on a number of points:

– $1 billion is nothing. Samsung makes this every 2.4 days.

– The verdict elevates the Samsung product to the same level as the Apple product. People perceive that if Apple had to go after it that way, then the Samsung smartphones are at least as good, if not better than Apple products.

– The publicity as a result of this is invaluable to Samsung. It has secured a significant amount of exposure in the past few weeks and is set to continue to do the same. This will no doubt be exploited.

One thing is for certain, the public perception is that Apple has a serious competitor. Couple that with the ongoing Foxconn issues, the lash back against them by technologists over the “death of innovation”, and the lack of any real new and innovative products in the past two years, and you have to wonder how long Apple will stay on top.

Apple is going to have to deliver an iPhone 5 that is well ahead of the Galaxy, otherwise plenty of consumers will be moving camps.

 

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