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Apple Inc And Samsung Electronics

1872 words (7 pages) Essay in Marketing

21/04/17 Marketing Reference this

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Introduction

Apple Inc., originally known as Apple Computer Inc. is a multinational cooperation founded by Steve Jobs and Steve Wozniak. The company was started when the first color graphics computer known as Apple II was build. Today, Apple Inc. is known for its ground breaking products like the iPod, the iPhone, and its tablet based iPad. Apple Inc. is known for its stylish, modern and elegant products.

Apple Inc. and Samsung Electronics Co., Ltd. are two of the leaders in the Smartphone and tablet market, but Apple took Samsung to court for infringing on its patents. Apple filled a complaint against Samsung for “slavishly” copying its designs. Samsung countered Apple’s claims by saying that Apple had also infringed on its patents. Lawsuits from both companies soon spread over 30 courts on four continents when negotiations failed. Apple filled a complaint to the United States District Court on April 15, 2011, which marked the start of the many lawsuits around the world. Did Apple provide strong evidences against Samsung for infringing on its smartphone and tablet patents?

I wrote my commentary based on these supporting documents:

AllThingsD – iPhone Caused “Crisis of Design” at Samsung (Memo)

Arstechnica – Apple’s case that Samsung copied the iPhone and iPad-in pictures

CNET – Apple: Samsung even lifted our icons (pictures)

AllThingsD – Samsung: Apple Didn’t Invent the Rectangle

full references can be found in the bibliography

Findings

In an email from Samsung’s Head of Mobile Communication outlined in source #1, JK Shin was comparing the iPhone to a Samsung product code named UX. He talked about how the company should concentrate more on producing high quality products. He stated that they should limit on the number of products they release because its quality not quantity that matters. JK Shin criticized their product by saying it’s laughable when you’re embarrassed by your device. As he was talking about the design of UX, Shin urged the developers to create devices that are easy to use regardless of age. He confessed in his email that he lacked confidence when it came to the ease of use of their phones. He admitted that the difference between their UX compared to Apple’s iPhone “is that of Heaven and Earth.” He finished his email by instructing the designers to create the exterior of the device with a metallic feel instead of a plastic feel.

Apple’s provides evidences against Samsung by showing different visuals of how Samsung deliberately copied their iOS devices. The photos on source #2 are comparing Samsung’s phones and tablets before and after the release of the iPhone and iPad. Both software and hardware are compared to show the similarities.

Apple provides evidences by showing how Samsung copied their software by comparing Samsung’s phone icons to Apple’s phone icons on source #3.

Samsung’s lawyer tries to prove that Samsung is not a copyist. He also tries to prove that patents that Apple accused them of infringing were not invented by Apple. He also tries to prove how Apple had infringed on its patents in source #4.

Analysis

Product Differentiation

Product Differentiation is the development or incorporation of attributes (such as benefits, price, quality, styling, service, etc.) that a product’s intended customers perceive to be different and desirable. Product differentiation is what makes Apple so popular because when you look at an Apple product, you immediately know the device is made by Apple. Apple’s products are easily recognized through the elegance of the device or its famous logo.

Apple over prices its products but its stylish, modern and explicit designs shows why it’s overpriced. Consumer recognition and loyalty is a strategy initiated by Apple because Apple makes sure that its products can easily be recognized. Apple’s modern and unique logo stands out from other competitors because the logo appears on all of its products. Apple’s logo is an apple with a bite on the right side, so the logo can easily be remembered. Apple is one of the few companies that products go out of stock in less than 24 hours after a launch of new products. The same cannot be said for Samsung because before the iPhone, Samsung used to be one of the leading market share holders, but according to Forbes, Apple owns 53.3% of the US’ smartphone market shares, while Samsung shares 41.9% with other android phones.

As shown in source #2, evidences provided by Apple clearly showed that Samsung had copied their design. Before the release of the iPhone, Samsung made smartphones that used Qwerty Keyboards, but after the iPhone, Samsung made smartphones that had large screens with no physical keyboards just as JK Shin had instructed when he said “It is very important that we make Screen Size bigger.” Same goes with tablets because Samsung made inexpensive looking tablets before the iPad but after the iPad was release, Samsung started making top quality tablets with glossy backs like the iPad. According to BestBuy Samsung’s tablets were so similar to the iPad that customers were returning Galaxy Tab tablets because they realized it wasn’t an iPad.

Diffusion of Innovation Theory

Diffusion of Innovation Theory shows the various points at which individual groups of consumers will become involved with a technological innovation. The speed of these adaption rates are affected by relative advantages, observable features, compatibility, complexity and testability.

Relative advantages

measures how better the new product is from the last one

Observable features

shows how the innovation works

Compatibility

shows how the innovation works, compatibility refers to the level of difficulty in understanding the innovation

Testability

testability lets the costumers test the innovation before buying it

Unlike competitors, Apple’s products are the easiest pick up and play devices because your device is ready the minute you finish setting it up unlike Samsung’s devices that require prior knowledge. Even JK Shin said in his email that “[they] must make products within the realm of common sense and based on ease of use” as stated in source #1. Consumer can easily measure how better Apple’s new product is from the last one because Apple’s innovators usually attend the keynotes. Because of relative advantages, observable features, compatibility, complexity and testability, Apple has made $54.5 billion in revenue for the first quarter of the 2013 financial year. 47.8 million iPhones were sold in 2013, giving Apple $13.1 billion in net profit and 22.9 million iPads were sold in 2013 which brought in more revenue.

Intangible Assets

Patents are a form of legal protection for inventors that prevents others from copying their creation without permission. Patents allow inventors to have exclusive rights over the production of the product so patents act as an incentive to stimulate innovation. The list below show patents Samsung was accused of violating.

Utility Patents ‘163

Enlarging documents by tapping the screen

Utility Patents ‘381

‘Bounce-back’ feature when scrolling beyond the edge of a page

Utility Patents ‘915

Distinguishes between single-touch and multi-touch gestures

Design Patents ‘087

Ornamental design of the iPhone (white color)

Design Patents ‘305

Rounded square icons on interface

Design Patents ‘677

Ornamental design of the iPhone (black color)

Design Patents ‘889

Relates to the industrial design of a tablet computer.

The visual comparison of icons in source #3 showed Samsung had violated the patents listed above. The first icon comparison was the telephone. Samsung copied Apple’s icons because Samsung’s smartphones had the same green color telephone icon with the phone image facing the same way. Apple’s contact icon has an image of a person and Samsung’s icons had the same things but the only difference was the icon’s color. The music icon on Apple’s iPhone is a disc with a music note and many of Samsung’s phones had the same icon but with different colors. The icon arrangements on the iPhone was also copied too because Samsung’s phones before the iPhone had no icons but Samsung started making phones with icons and they were arranged with 4 icons going vertically and 4 horizontally just like the iPhone. Samsung’s phones and tablets never had a dock on their devices but started making devices with docks that can be customized to the users’ likening like Apple’s devices. According to source #2, Samsung was warned by third parties like Google that its tablets were too similar to the iPad and was asked to create a distinguishable design.

During the trial Samsung accused Apple of violating on its patents and the list below show patents Apple was accused of infringing on.

Standards-essential patents ‘516

Manages the phone’s resources and battery by prioritizing data

Standards-essential patents ‘941

Provides a way to package and transmit data more efficiently

Standards-essential patents ‘711

A method allowing multi-tasking while playing music on the phone

Standards-essential patents ‘460

Taking and emailing pictures using a scroll action

Standards-essential patents ‘893

Switching between pictures in a gallery and the camera

Samsung’s lawyer accused Apple of infringing on its patents because Samsung’s data transmission patents allow the iPhone to do things like send pictures and surf the Internet. He also said that Samsung was the first to offer a camera phone with three methods for sending photos. His other evidences against Apple was a patent that covered being in a photo gallery, taking a new picture and returning to the same place in the gallery, and the final evidence involved playing music while doing another task.

Conclusion

Product differentiation is what made Apple famous. Apple differentiates its devices from competitors like Samsung by making it stylish, unique and easy to use. Its retail stores not only make distribution easy, but give customers a chance to test the devices before buying. Apple’s fan based is the reason Apple known more than 50% of the smartphone market. Because of all these methods used by Apple, competitors sometimes want to copy instead of innovate. Evidences provided by Apple clearly showed that Samsung had infringed on its patents like utility and design. Apple provided visuals evidences like icon comparisons, design comparison before and after the iPhone, User interface and JK Shin’s internal memo proved that Samsung knew it was infringing, but processed anyway.

After months of battling with solid evidences from both companies, Samsung’s phones and tablet were found to have infringed on Apple’s patents portrayed by the images in source #2, but none of Apple’s devices were found to have infringed on Samsung’s patents because Apple gets its wireless chips through Intel. Samsung was ordered to pay Apple $1.05 billion dollars for any damages caused, making it a major victory for Apple in the United States.

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