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Patents Wars 2: The Asian Empire Strikes Back - Are The Tables About To Turn On Apple?

Tyler Durden's picture


Much has been said about Apple's recent victory over its key component supplier, Samsung, in a recent US court decision the direct result of which has been the halt of sales of several Samsung products which are already obsolete in cell phone year terms. The paradox here is that AAPL's victory is quite pyrrhic: if and when Samsung feels sufficiently threatened, it can just pull a Gazprom and halt the supply of mission critical components to the world's biggest publicly traded company. Alternatively the Chinese politburo can one day decide to pull FoxConn's operational license, in the process bankrupting AAPL overnight. But these are of course M.A.D. scenarios which in rational, non-centrally planned market would never take place, and so we have no reason to worry about them. That said, it is increasingly becoming clear that patent warfare fought in partial domestic judicial systems, will be the next form of protectionism as pertains to that most faddy of technology: the ubiqutous smartphone. And while Apple may have won the first battle, the outcome of the war is still very much unclear: in fact, the return salvo after Samsung's big defeat on US soil may come quite soon, this time courtesy of another Chinese Apple "clone", HTC Corp, which if it goes against the Cupertino company, could have a large impact on revenues.

From Bloomberg:

Apple Inc. (AAPL) may face a difficult task invalidating two HTC Corp. (2498) patents for data transmission in wireless devices, a U.S. trade judge said at a trial that could lead to import bans on the newest iPad and next version of the iPhone.


“Clear and convincing means something to me,” U.S. International Trade Commission Judge Thomas Pender said yesterday in Washington, referring to the legal standard in determining that a patent shouldn’t have been issued. “I have to be pretty darn certain a U.S. patent is invalid.”


HTC accuses Apple of infringing two patents it owns for ways to reliably transmit a larger amount of data. Taoyuan, Taiwan-based HTC said the patented methods are critical to the 4G technology known as LTE, or long-term evolution, that allow faster downloads.


A victory could let HTC seek an import ban of the latest iPad and even the newest iPhone, if it uses LTE when it’s unveiled as early as next week. That could give the Taiwanese handset maker leverage to force a settlement with Apple, which has made its own patent-infringement claims against HTC.

Could Apple lose? Who knows, although it is increasingly likely that as the partial distinction of court systems (Samsung won in Korea, lost in the US) becomes clear, we may well see a new form of trade protectionism: one that is won and lost in the courts for makers of the most demanded products. It also means that should China decide to increase it outright aggression with US-based Apple, it could certainly impair the iBlank maker, especially since it is the US consumer who is increasingly tapped out, and the bulk of future growth hopes lie with the rising Chinese middle class and domestic consumer.

Could China get involved to demand its "pound of externalities" in this conflict? Who knows, but China is certainly aware what the market potential of smartphones is, and that it would like to dominate the market as much as possible.

The global smartphone market grew 62 percent last year to $219.1 billion, according to Bloomberg Industries, and consumers are demanding ever-faster downloads of movies, music and websites on what has become more a handheld computer than a simple phone. Carriers such as AT&T Inc. are converting to faster LTE technology, and network-equipment maker Cisco Systems Inc. (CSCO) projects that worldwide mobile-data traffic will soar 18- fold by 2016.

While the prehistory between Apple and Samsung is well-known, this is the story, in a nutshell, behind the looming conflict between Apple and HTC:

Apple and HTC have been embroiled in patent battles over features in smartphones since March 2010, when Cupertino, California-based Apple filed its first infringement claim at the trade agency. The case at trial yesterday, and an earlier case HTC lost at the commission, “were filed in retaliation against Apple,” McKeon said.


Apple contends phones by HTC and other competitors that run on Google Inc. (GOOG)’s Android operating system copy features that make the iPhone unique. The March 2010 complaint against HTC has spread to a global war involving Apple and Android-handset manufacturers that is being contested in courts on four continents.


HTC lawyer Tom Jarvis of Finnegan Henderson said the company was the first to sell Android and 4G devices and one of the first with touch screens.


“HTC is an innovator,” Jarvis told the judge. “It’s no Johnny-come-lately.”


In this case, though, HTC acquired the patents at issue in April 2011, around the same time it began selling its first LTE phone, the Thunderbolt. The patents are part of a portfolio HTC bought for $75 million from ADC Telecommunications Inc.


“I don’t care if they bought these patents to sue you or not,” Pender told McKeon. “They are a property right.”


In a court filing, HTC said it bought the patents, which ADC said were being infringed by Apple, “to protect itself and its customers from these aggressive tactics and to preserve its ability to compete in the United States.”


Yesterday’s testimony, much of which wasn’t open to the public, focused on whether HTC is using the technology, a requirement to win the case under trade law.


“LTE products were particularly important to our strategy in 2011,” when the complaint was filed, said Martin Fichter, HTC America’s vice president of product and operations. “We’re a pioneer in that field.”

How will this play out? It is still too early to know. But in a world in which currency warfare has been going on for three years, and in which conventional trade wars are becoming more prevalent, it would be no surprise if the next round of warfare for limited consumer dollars is not fought in the FX trading room, nor in the antitrust commission, but in various patent law court rooms. Lawyers: take note.


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Fri, 09/07/2012 - 14:20 | 2772546 SeverinSlade
SeverinSlade's picture

Karma is a bitch, isn't it Apple?

On a side note, if China were to ever shut down Foxconn, that would be the most entertaining trading day in history.  The term "drop like a brick" would be an understatement with regard to what would happen to AAPL.

Fri, 09/07/2012 - 14:31 | 2772580 Blasé Faire
Blasé Faire's picture

All you'd need was to get a rumor going.  Then let the carousel begin.  Then again, Sharp's announcement that it may not be able to produce displays in time for the next iPhone didn't do anything.  I'm waiting for something to finally be baked into AAPL's price.  On every rumor it pops, then on the verification of the rumor it rips.  But the downside hasn't really shown up - maybe it's because AAPL doesn't seem to be able to disappoint.  Benefits of brilliant marketing.

Fri, 09/07/2012 - 15:46 | 2772919 bank guy in Brussels
bank guy in Brussels's picture

So Apple had a fraudulent 'win' in the courts of bribed US judges, robbing and defrauding Korea's Samsung of a billion plus, US judges instructing the jury to protect Apple stock holdings in US pension funds and hedge funds -

Great post from Karl Denninger on how Apple, claiming copying of design by Samsung, tho Apple was really copying a design made by Korea's LG company back in 2001:

Fri, 09/07/2012 - 19:05 | 2773448 machineh
machineh's picture

In a case of sweet revenge, Samsung is selling 200,000 Galaxy S III phones PER DAY while Apple works the rumor mill:

Sickened by Apple's grabby greed, Americans are buying better and cheaper Android gear before the Rotten Apple Evil Empire can close the borders.

Apple = FAIL.

Fri, 09/07/2012 - 20:02 | 2773565 monoloco
monoloco's picture

Why can't we all get along? Why the fuck do people get so jacked up over what kind of phone someone uses? It's just a phone for Christ's sake, it doesn't define your character, we don't berate each other over what brand of car we drive or sneakers we wear. To each his own, for fuck's sake, get a life!

Fri, 09/07/2012 - 22:46 | 2773846 Uncle Remus
Uncle Remus's picture

What a fucking tool.

Fri, 09/07/2012 - 20:09 | 2773573 Centauri
Centauri's picture

Hmm. The most valuable company in the history of ever, and more cash than God Himself. Fail is probably not *exactly* the best word to use to describe what AAPL is equal to.

Mon, 09/10/2012 - 04:23 | 2777771 Ar-Pharazôn
Ar-Pharazôn's picture

they made this money on 16 hours 7/7 chinese worker. Great job mr. Job

Sat, 09/08/2012 - 10:05 | 2774380 Lucius Corneliu...
Lucius Cornelius Sulla's picture

Benefits of brilliant marketing.

Although Apple does have a brilliant marketing strategy, I think a lot of it has to do with the consumer fad factor.  Consumer tastes are fickel.  Just ask the other consumer products companies that were at the top of the world; Sony (Walkman), Motorola (flip phone), Nokia.

Fri, 09/07/2012 - 14:42 | 2772640 Azannoth
Azannoth's picture

AAPL has 0 leverage in this fight as they are 100% depend on cheap parts and labour from Asia to make any profit, iShit produced in the US/Europe would be 4x as expensive and totally uncompetitive

AAPL is playing with fire and it will get burned, all they have are 'designs' and a brand everything else is running on commodity hardware all that is differentiating their products from the competition are the stickers on the packaging

Fri, 09/07/2012 - 14:53 | 2772684 Zero Govt
Zero Govt's picture

Apple is a software company missed that in your idiotic assesment of what Apples strengths are

Fri, 09/07/2012 - 15:02 | 2772723 ParkAveFlasher
ParkAveFlasher's picture

Really?  Because my SanDisk $15 refurb """MP3""" player lets me play all my bought, ripped, or pirated Prince Purple Rain tracks without buying totally upcharged propriety hardware and pricey, cumbersome subscription services.

Who's the monopolist in this equation?


Fri, 09/07/2012 - 16:21 | 2773000 Zero Govt
Zero Govt's picture

so does my iMac and MacBook, 2,200 tracks and there's not a single paid-for song on either device

...ditto my GF's iPhone

iTunes absolutely rocks as a free music download platform, every DJ i know (stars and bar-club DJ's) use Apple 

not sure if it'll play something as tired and old hat as Prince but it's great for the latest House music

Fri, 09/07/2012 - 16:43 | 2773098 ParkAveFlasher
ParkAveFlasher's picture

Well, color me iPaisley, JOKEnfold, but you are proving my point.

Sat, 09/08/2012 - 05:59 | 2774152 frenzic
frenzic's picture

Yeah.... right. I bet you were joking or you're some kind of paid shill. If I am wrong I'd happily send you an invite to the real thing. Sharing is caring and nothing's free.

Sat, 09/08/2012 - 22:30 | 2775493 Fecklesslackey
Fecklesslackey's picture

But is sooooo 'no cool'

Fri, 09/07/2012 - 15:03 | 2772734 Blasé Faire
Blasé Faire's picture

It's an important distinction.  But I would say there's a lot more hype for their new hardware iterations than their software upgrades.  While this is a terribly weak survey, among those polled, present iPhone owners (who would receive iOS6 free) are the most likely to buy the new iPhone.

If that's to be believed at all, the hardware is pretty significant and it is undeniable that supply chain disruptions could severely damage Apple.

Fri, 09/07/2012 - 16:39 | 2773075 Zero Govt
Zero Govt's picture

"...the hardware is pretty significant.."

i'd agree it adds (value) to Apples offer in that like a BMW much is bought in from suppliers.

Apples strength is cutting edge, fault free, software. On that skill base, which is absolutely world leading and has been for decades, Apple builds (buys in) other top line products, as does like BMW

the high end pricing Apple can target because its software is so good also gives it another luxury, the best or newest hardware such as the rumoured curved glass screen for iPhone 5 or something basic like aliminium casing rather than competitors low rent plastics

but everything stems from Apples cutting edge software skills 

Fri, 09/07/2012 - 15:45 | 2772911 Azannoth
Azannoth's picture

No they are not, MS is a Software company AAPL is a Hardware company with the exception they buy all their hardware from suppliers

they don't even license their software they glue it to 'their' hardware and make it impossible to use any of their services without it(the hardware)

Fri, 09/07/2012 - 16:29 | 2773058 Zero Govt
Zero Govt's picture

"AAPL is a Hardware company with the exception they buy all their hardware from suppliers."

not another moron!



Fri, 09/07/2012 - 16:17 | 2773021 swmnguy
swmnguy's picture

Is Apple really a software company?  I might almost say they're a Design company, or maybe just a Marketing company.  Over a decade ago I heard a presentation in which a smart feller said Wal-Mart was a software company, because he claimed their competitive advantage was derived from software managing their delivery and logistics structure.  Everybody else in retail, he said, did everything else Wal-mart did; in some cases better.  But nobody else had their logistics and supply chain figured out as efficiently.  Which leads me to question what it is that Apple really does so differently that makes their stuff so much more desirable.

Fri, 09/07/2012 - 16:42 | 2773054 Zero Govt
Zero Govt's picture

"Is Apple really a software company?"

Er no, it makes snowmobiles you moron

of course Apple are software, it's what makes Apple an Apple.. they can't build hardware, their marketing is based on their software skills as is the iPhone and platforms like iTunes etc

Fri, 09/07/2012 - 17:26 | 2773196 Azannoth
Azannoth's picture

You are missing the point, their software is no better or worse than anybody else's it's their designs and brand that differentiate them, besides iOS is a Unix/Linux under the hood with a proprietary GUI ditto the rest of their software

Fri, 09/07/2012 - 18:05 | 2773290 swmnguy
swmnguy's picture

What Azannoth said. 

Really.  Stop being so literal, or stop calling people morons.  If you read my comment to the end, you saw the part about Wal-mart being a software company?  Well, duh, they're a retailer.  The point, applied both to Apple and Wal-mart, was a little larger.

Besides, I've done work for a snowmobile company that actually seems to think they're in the apparel business.

If you're going to hang around a website concerning itself with business, it helps to have some familiarity with the way businesses think about themselves.  It ain't the way an outsider might expect.

Sat, 09/08/2012 - 01:03 | 2773976 Freddie
Freddie's picture

Wal Mart is a software/logistics company.  Up to a few years ago, KMart had the worse Point of sale and inventory system.  They came out with all sorts of stores (shoes, home improvement and some others) which largely failed.  If they had invested earliers in a decent MIS system they would have been able to compete a bit better.

Apple is a lot of things.  Design, lifestyle/gadget and software company.  Yeah it is just UNIX/LINUX whatever but they put it on a lot of platforms to create devices for music, phones, pads.   At the product lifecycle time aka when they came out - it was a bit ahead of others. They soak up all the demand for the new niche wit high prices and when competitors come in - they cut prices.  Why buy a Zune and when an iPod was about the same price.

Sat, 09/08/2012 - 10:11 | 2774389 swmnguy
swmnguy's picture

Yes, that's the kind of thinking I was pointing toward.

Fri, 09/07/2012 - 18:41 | 2773384 Arnold Ziffel
Arnold Ziffel's picture

<<AAPL has 0 leverage in this fight as they are 100% depend on cheap parts and labour from Asia>>


Actually, about 99% of the stuff we use in the USA is made in Asia so if we "sufficiently piss them off" we are sunk...we'd be "shooting ourselves in the foot."  That's why there will never be a war with China....all of our factories are there...we'd be bombing our own factories---GE, AAPL's FoxConn, and on and on. The courtroom is a much better place to fight as long as the judges are impartial.

[BTW, I think even Barry's Nobel Peace Prize says "Hecho in China" on the bottom.]

Fri, 09/07/2012 - 15:33 | 2772865 mirac
mirac's picture

Think WWIII...

Sat, 09/22/2012 - 23:01 | 2821279 old naughty
old naughty's picture

Ok. I am thinking...

Yes, needs lots of money-printing, and body-bags I get that.

Yes, it will come to that when the dog-eat-dog cycle (of you copy i copy you price down i price down further) fast approaching end,

But is war hardware-, software-, marketing- intensive?

I am thinking...Can Foxconn turn itself into maker for war? Hummmmmm.

Fri, 09/07/2012 - 14:22 | 2772556 Joe Davola
Joe Davola's picture

I'll bet the waitress is with the Russians too.

Fri, 09/07/2012 - 14:25 | 2772566 AlaricBalth
AlaricBalth's picture

Send Lawyers, Guns and Money!!

Fri, 09/07/2012 - 14:35 | 2772606 SeverinSlade
SeverinSlade's picture

HTC and Samsung should consider a merger with S&W.  At least then they have something a little bit more intimidating than just their legal team.

Fri, 09/07/2012 - 19:12 | 2773465 machineh
machineh's picture

When the first .40 cal. semi-auto with wireless and 4G comes out, I'm buyin' it!

Fri, 09/07/2012 - 14:24 | 2772559 El Viejo
El Viejo's picture

Open Source!

Fri, 09/07/2012 - 15:16 | 2772781 css1971
css1971's picture



Fri, 09/07/2012 - 14:25 | 2772564 LongSoupLine
LongSoupLine's picture

I guarantee China is doing the over/under on dropping Foxconn as to keeping it.  I wouldn't be surprised if the Chinese "decision makers" have been padded very nicely by one Sunnyvale/Palo Alto located company.

Fri, 09/07/2012 - 14:34 | 2772602 adr
adr's picture

There are plenty of other sources to build shitty phones. There aren't many other sources for the parts to build the phone in the first place. The iPhone can't exist without Samsung, Sharp, and a host of other corporations. Apple doesn't make a thing themselves and the majority of their patents are absolute bullshit that any designer or developer would never have been able to get granted.

Fri, 09/07/2012 - 15:06 | 2772742 Troll Magnet
Troll Magnet's picture

China needs Apple probably moreso than Apple needs China.  Cheap labor everywhere!  In fact, shit from China's getting expensive because of their rising labor costs and many companies are looking elsewhere - Vietnam, Pakistan, etc - to set up shop.

Fri, 09/07/2012 - 14:44 | 2772645 malikai
malikai's picture

Someone please remind me again why you slaughter your cash cow?

Fri, 09/07/2012 - 15:04 | 2772737 ParkAveFlasher
ParkAveFlasher's picture

Because your geopolitical rival's NASDAQ suckles exclusively at its teet, and at its teet alone.

Sat, 09/08/2012 - 00:51 | 2773965 DeadFred
DeadFred's picture

And because your rival's qualitatively superior military forces (which impede any of your expansionistic fantasies) are fed by the high-octane fuel of an increasingly fragile financial system which you may (or may not) be able to destroy with acts that fall short of open warfare.

You can be certain the Chinese are wargaming many scenarios.

Don't make the mistake of believing they think like you do.

Fri, 09/07/2012 - 14:25 | 2772565 buzzsaw99
buzzsaw99's picture

If I was samsung I would embargo the shit out of apple. NO PARTS FOR YOU!

disclaimer: I love samsung products.

Fri, 09/07/2012 - 15:18 | 2772787 Yen Cross
Yen Cross's picture

 The new S-3 rips Buzz. We don't need no stinking !pads...   The S-3 has a great screen, super light! Isn't insanely expensive"cultish APPL" expensive. I like Android, and it's only getting better! :-)

Fri, 09/07/2012 - 16:38 | 2773086 css1971
css1971's picture

How's the battery life? You up to 2 recharges per day yet?

Fri, 09/07/2012 - 20:13 | 2773578 Centauri
Centauri's picture

I guess most companies would love to kick their best customer tot he curb. 

Fri, 09/07/2012 - 14:26 | 2772569 q99x2
q99x2's picture

Malum MAlum

Fri, 09/07/2012 - 14:29 | 2772577 El Viejo
El Viejo's picture

Is that Latin for "What goes around comes around." ?

Fri, 09/07/2012 - 14:29 | 2772575 Dr. Engali
Dr. Engali's picture

The whole "market " swings on the word of the fed and a single stock. It's never felt so precarious in my life.

Fri, 09/07/2012 - 14:45 | 2772581 El Viejo
El Viejo's picture

It's an upside down pyramid scheme. Just give it a nudge and...Timberrrr!

Fri, 09/07/2012 - 14:34 | 2772598 e-man
e-man's picture

I sometimes wonder if German people in coffee houses and beer halls were not having these identical conversations about economics and trade wars, back in 1921/1922.

Fri, 09/07/2012 - 14:42 | 2772639 El Viejo
El Viejo's picture

Don't know, but Adolf was probably still trying to get into art school. Too bad the Jewish professors turned him down.

Fri, 09/07/2012 - 14:51 | 2772678 alien-IQ
alien-IQ's picture

they probably were...with the added advantage of not being distracted by smart-phones, tweets and facebook updates.

ah the days of attention spans beyond the 1 minute mark.

Fri, 09/07/2012 - 16:36 | 2773083 css1971
css1971's picture

I was just speculating today about a disappointing iPhone launch causing Apple to tank, closely followed by the Nasdaq, S&P and so on.

Fri, 09/07/2012 - 14:30 | 2772579 adr
adr's picture

Samsung stands to lose $4 billion if it lost Apple as a buyer of its parts.

How much does Apple stand to lose if it can't ship the iPhone5 or the next iPad?

I would guess at least $600 billion in market cap.


They would make the $4 billion back and more.

Fri, 09/07/2012 - 14:37 | 2772612 Mark Carney
Mark Carney's picture



-Mr. Burns

Fri, 09/07/2012 - 14:40 | 2772625 AntiMort
AntiMort's picture

The problem is Apple is Samsung's largest customer so they would also take a large hit.

Fri, 09/07/2012 - 14:57 | 2772706 buzzsaw99
Fri, 09/07/2012 - 14:50 | 2772667 Tijuana Donkey Show
Tijuana Donkey Show's picture

Apple splits the production on their screens, to prevent a senario like this. Also, you don't think APPL has the backing of the USGOV/NSA/CIA like Facebook does to put this stuff out there? No one is fucking with the serf trackers, period. Samsung is a Korean company, and the US cups South Korea's nuts against the North. Hell, I bet APPL has enought cash they could buy Samsung. Just remember the secret to dieing rich is this; if it flies, floats, fucks, or fabricates, rent, don't own. 

Sat, 09/08/2012 - 06:06 | 2774156 bigwavedave
bigwavedave's picture

Samsung had better hurry the fuck up if they want to go down that road...

By Lawrence Latif APPLE HAS CUT DRAM and NAND memory module orders from its mobile devices arch-rival Samsung as it tries to move away sourcing most of its parts from its biggest competitor.

Fri, 09/07/2012 - 14:35 | 2772594 Zero Govt
Zero Govt's picture

the most obvious and glaring regulatory threat in Smartphones is Googles (remarkable?) presence at the top of the tree with Android.

Achieved with no commercial skill, just dumping their software with no price tag at all on the phone market and by running huge red ink losses. If ever a company deserved regulatory investigation for fowl practices, Google stands out like a sore/rotten thumb

Along with their dominance in Search this second market monopoly must require vast sums of brown envelopes and corruption to keep competition commisioners quiet as church mice on such obvious ant-competitive monopolist tactics in so many markets across Europe, the US and world.

Where does GOO hide the cost for corruption on their balance sheet? 

Fri, 09/07/2012 - 14:37 | 2772610 adr
adr's picture

Oh and Apple is squeaky clean. Somehow having the patent office grant them everything under the sun with prior art going back decades that should have invalidated the claim immediatly.

Fri, 09/07/2012 - 14:46 | 2772653 Zero Govt
Zero Govt's picture

not sure any corporatiomn is squeeky clean but Googles dumping tactics to a market monopoly are glaring 

Apple gets there by achievement and profitably (commercial tactics), Google by dumping their product with no price tag dripping in red ink

it's th most blatantly obvious anti-competitive and uncommercial tactics which piss over all monopolist legslation on the subject

Fri, 09/07/2012 - 14:45 | 2772652 malikai
malikai's picture

LOL. Still haven't learned eh?

Fri, 09/07/2012 - 14:47 | 2772655 Zero Govt
Zero Govt's picture

what's the lesson today?

Fri, 09/07/2012 - 14:51 | 2772677 Tijuana Donkey Show
Tijuana Donkey Show's picture

Don't forget Google Apps!

Fri, 09/07/2012 - 14:35 | 2772605 timbo_em
timbo_em's picture

Do the judges and jury members in Taiwan and elsewhere in Asia also have pension schemes that largely depend on their decisions in court?

Fri, 09/07/2012 - 14:36 | 2772607 Poule Mouillee
Poule Mouillee's picture

It will be interesting to see what AAPL has to say about this...

Chinese company uses leaked photos to copy, patent iPhone 5 design


Fri, 09/07/2012 - 14:47 | 2772657 Blasé Faire
Blasé Faire's picture

I have doubts that this will actually ever work out - and am not too confident in the Chinese patent enforcement system to begin with - but this is fucking brilliant and hilarious.  The biggest issue is probably the use of an iOS6 ROM which they don't have any protection for.

Fri, 09/07/2012 - 14:59 | 2772708 BattlegroundEur...
BattlegroundEurope2011's picture

Steve Jobs is turning in his cryo freezer

Fri, 09/07/2012 - 14:37 | 2772611 Der Wille Zur Macht
Der Wille Zur Macht's picture

iPhone 5 is going to break sales records. Mark my words.

Fri, 09/07/2012 - 14:38 | 2772622 Mark Carney
Mark Carney's picture

lol, where?  Iceland

Fri, 09/07/2012 - 19:17 | 2773476 machineh
machineh's picture

No, Cupertino. After employee discount ...

Fri, 09/07/2012 - 15:12 | 2772769 css1971
css1971's picture

Looking at the leaked pics, it's just a longer iPhone 4. An iPhone 4.2 if you like.

Who's going to buy it? Everyone who wants an iPhone has already got an iPhone 4. So... It's basically going to be the fanboys who have to have the latest. All the rest of the iPhone owners will just upgrade when theirs falls apart.

Fri, 09/07/2012 - 15:56 | 2772964 FranSix
FranSix's picture

Wait for a bigger screen.  Like the Samsung phone.

Fri, 09/07/2012 - 16:33 | 2773068 css1971
css1971's picture

iPhone 5 ... The Facebook of phone launches.


Fri, 09/07/2012 - 19:18 | 2773478 machineh
machineh's picture

facePhone 5 ... ah ha ha ha!

Fri, 09/07/2012 - 14:37 | 2772613 caimen garou
caimen garou's picture

From big companies to small town craftsmen, someone is alwys ready to snatch a good idea!

Fri, 09/07/2012 - 14:38 | 2772620 trebuchet
trebuchet's picture

iin 6 months, its be a Wharton case study with some Assistant/associate Prof spewing out how its all predictable and they hasd it nailed.

Fri, 09/07/2012 - 14:40 | 2772628 UGrev
UGrev's picture

Biting the hand that feeds it. How many tech parts does Apple use from Samsung in their devices?  Yah.. not a smart move Apple. 

Fri, 09/07/2012 - 14:41 | 2772634 ParkAveFlasher
ParkAveFlasher's picture

Apple has taken our natural, almost instinctual desire to carry close and frequently fondle a shiny, smooth, reflective slab of pure, conductive metal and completely subverted it, bitchez.

Fri, 09/07/2012 - 14:43 | 2772641 FranSix
FranSix's picture

Samsung got the jump on Apple by providing their next step, with a bigger phone. But there's a subtle irony in the markets which people tend to ignore, is that with Chinese slave labour and the tacit approval of the politburo, we have an economy of telecoms, crappy goods and debt derivations for everything else.

What has also occurred is a drastic loss of purchasing power in the U.S. dollar, because the Renimnbi is pegged to it, which Chinese apparatchiks print with abandon.  A Taiwanese style reversal and collapse of their currency will appear like a collapse of the U.S. dollar.

What if people get bored with the smart phone?


Fri, 09/07/2012 - 14:50 | 2772668 Zero Govt
Zero Govt's picture


define "slave labour" would you?

a) interviewed and volunteered to work

b) forced against their will

Fri, 09/07/2012 - 14:55 | 2772694 FranSix
FranSix's picture

Its a matter of their poverty and inability to protest their working conditions in a totalitarian communist society, where they live in atrocious conditions and work long hours for very little reward.

Almost all of the goods that we purchase are now produced in these conditions by using debt, for which we think we're rewarding ourselves, rather than using a robust currency that is earned on the basis of a wage.


Fri, 09/07/2012 - 16:54 | 2773136 dadichris
dadichris's picture

Given that any command economy will have a comparative advantage in trade, plus China's human rights and environmental records - why the heck does the US have trade relations with China at all?

Fri, 09/07/2012 - 17:56 | 2773270 Dr. Acula
Dr. Acula's picture

>why the heck does the US have trade relations with China at all?

A US person and a Chinese person engage in trade because each party ex ante expects to benefit from the exchange.


Fri, 09/07/2012 - 18:00 | 2773279 Dr. Acula
Dr. Acula's picture

>inability to protest their working conditions

You mean they aren't allowed to quit?



Fri, 09/07/2012 - 16:46 | 2773114 Quantum Nucleonics
Quantum Nucleonics's picture

It's only "slave" labor in an elitest, 1st world sense.  The people working at Foxcon and the rest work their asses off for what you regard as slave wages, but compared to living in the back breaking agrarian lifesyle of rural China on no money and less than 1000 calories a day, it's salvation. 

Fri, 09/07/2012 - 16:57 | 2773145 FranSix
FranSix's picture

Sure, if it was all democratic.  But its all glossed over with a veneer of globalization to us, and perhaps for the prosperous in China, but the reality for the Chinese is not much different than a corrupt communist state.

Fri, 09/07/2012 - 18:08 | 2773304 Dr. Acula
Dr. Acula's picture

>Sure, if it was all democratic.  But its all glossed over

How would "democratic" make things better?

I live under the thumb of a democratic government. Isn't it "slave labor" when 40% of the fruits of my labor are taken to hand out foodstamps to people I don't know?


Sat, 09/08/2012 - 09:06 | 2774287 falak pema
falak pema's picture

It pays for social insurance of three types :

1° Predators within society  2° Predators from without, across the frontier. 3° National Infrastructure/social services 

saves you bullets and your wife from getting raped, and your sons from becoming apes, as they get educated, while you drive down the roads your 40% contributed to build. You have to share some with the less productive in the community; otherwise it would not be a community and there would never be an army there to defend the wealth of the most productive from external threat. (Its the least productive that enlist and die first; fact of life).

Never was a perfect world in man's history. The main issues in our present day time line are (barring current mega crisis) : can we make it more efficient (get more quality insurance for less money) and can we make the individual enjoy greater freedom for the same tax payment (more personal liebensraum, aka innovative freedom, for same bucks, without depriving others of theirs)? Better bangs for your tax bucks...allround. Not an easy tradeoff. Never was in an increasingly complex society.

If you get rid of government regulation/arbitration (warts and all), you are on your own and its back to the jungle! 

Somehow, man has always chosen government and "civilization"; warts n all. Have u a better solution?

Mon, 09/10/2012 - 04:30 | 2777775 matrix2012
matrix2012's picture


fran6... i wonder if you ever step out of your hometown? LoL

"To travel is to discover that everyone is wrong about other countries." -- Aldous Huxley, author of 'Brave New World', 'Brave New World Revisited', 'The Doors of Perception', etc.




Fri, 09/07/2012 - 14:57 | 2772704 dark pools of soros
dark pools of soros's picture

"What if people get bored with the smart phone?"

  And do what instead?  get a job?

Fri, 09/07/2012 - 15:27 | 2772831 FranSix
FranSix's picture

Very good question.  Allow me direct to to an iPhone app, also available for iPad that will allow you to track down... a 'book.'  A physical one.  In a building called a... 'library.'

Fri, 09/07/2012 - 16:34 | 2773077 dark pools of soros
dark pools of soros's picture

the iCrowd will tell you that physical media is like taking the scenic route...  in a downpour....  with two flat tires..   while holding in the shits from a fast food bing...



Fri, 09/07/2012 - 17:00 | 2773152 FranSix
FranSix's picture

One might say that books are a lovely respite from being dragged down by inadequate and narrowly defined data available on really small hand held devices.  And that people are binge-ing on a clear absence of nutritional information.

Fri, 09/07/2012 - 16:50 | 2773125 Quantum Nucleonics
Quantum Nucleonics's picture

They might notice that the world has turned to crap.  But that's the point of the smartphone/tablet revolution.  It's the new opiate for the masses.  Something new was needed, hundreds of tv channels worn't working anymore keeping the masses entertained.  It was either smartphones or a return to Circus Maximus and gladitorial games.

Fri, 09/07/2012 - 15:07 | 2772746 Yen Cross
Yen Cross's picture

FoxConn= COMA

Fri, 09/07/2012 - 16:12 | 2773008 swmnguy
swmnguy's picture

I don't know what's dumber; a client dependent on a vendor suing that vendor, or a vendor pirating the technology they're selling to their client.  It boils down to whether or not Apple can replace Samsung and HTC as vendors.  Clearly the Asians are betting they can survive without Apple.  The question is whether or not Appe can survive without their vendors.  I see this sort of thing from time to time in my industry, which is much more of a commodity than this one.  But in my industry, vendors can be replaced, thought not without painful transitions for all involved.  We'll see.  Apple has certainly been riding for a fall.

Fri, 09/07/2012 - 16:50 | 2773126 dark pools of soros
dark pools of soros's picture

Cannibalism is the new Capitalism..  maybe Mitt is the right man at the right time for this gorefest economy

Fri, 09/07/2012 - 18:08 | 2773306 swmnguy
swmnguy's picture

"Cannibalism is the new Capitalism."  Very succinct.  It applies to a lot of the things we're seeing.  As for Mitt, well, I don't know if he's the best man for the times, but he sure as hell is a man OF the times.  I've been thinking maybe we should start a movement to write in Bernie Madoff, actually.

Tue, 09/11/2012 - 17:48 | 2783289 dark pools of soros
dark pools of soros's picture

bernie was too smooth - i think we want this over by next summer

Fri, 09/07/2012 - 16:25 | 2773043 reader2010
Fri, 09/07/2012 - 16:41 | 2773095 Quantum Nucleonics
Quantum Nucleonics's picture

Apples victory over Samsung is meaningless, for now.  Of course Samsung was going to get stomped in the trial phase!  They had the trial in f-ing Cupertino!!!  The appeal process gets the case out of the 9th Circuit, back to a special patent court on the east coast.  The Supreme court has been itching to limit the abuses of patents for a while now, this could be the chance.  It's silly to patent the look and feel of a product or a hand gesture to scroll.  Patents should never have been issued for any of this crap.

Fri, 09/07/2012 - 16:53 | 2773135 dark pools of soros
dark pools of soros's picture

we'll never get our iTeleporters with this mentality...

Sat, 09/08/2012 - 06:14 | 2774160 Haager
Haager's picture

And the jury ignored prior art because the foreman said it would only apply on devices with the same processor, hardly ignoring the issue that this way of thinking would make a lot of all patents meaningless.

Fri, 09/07/2012 - 17:24 | 2773189 Yperkeimenos
Yperkeimenos's picture

   Multinational, multibillion corporations will be the goverments of tomorrow. Those of you who dream of unregulated, free markets take note as these colossal companies take control and start monopolize or patent even geometrical shapes like the circle. It is totalitarianism all over again but with a private sector flavour this time.

Fri, 09/07/2012 - 17:48 | 2773240 Dr. Acula
Dr. Acula's picture

"take note as these colossal companies take control and start monopolize or patent even geometrical shapes like the circle"

But patents would not exist in a free market. A patent can only exist when there is a government willing to aggress against people who transform their own property into different forms using a particular sequence of steps. You should blame the primary aggressor (the government) before blaming companies like Apple that are only indirectly responsible.


Fri, 09/07/2012 - 18:06 | 2773298 Freewheelin Franklin
Freewheelin Franklin's picture

Do you blame the child for asking for chocolate cake for dinner, or the parent that gives it to him, or the child for eating it?

Sat, 09/08/2012 - 03:26 | 2774096 Yperkeimenos
Yperkeimenos's picture

I do blame the parent that gives in to a child asking for a loaded gun,allthough comparing multibillion corporations to a child is not very reassuring in my opinion.

Sat, 09/08/2012 - 03:22 | 2774094 Yperkeimenos
Yperkeimenos's picture

A patent exists to protect the private interests of its creator,the judicial system and the goverment act only as mediators between two warring parties.It is not Apple against the Goverment but against Samsung(another private entity) as it is Google against Yahoo and so on.In a free market there would always be the need for intelectual property protection since even without a goverment who's to stop someone from copying someone elses creation.

Fri, 09/07/2012 - 23:03 | 2773861 Uncle Remus
Uncle Remus's picture


Fri, 09/07/2012 - 18:04 | 2773285 Freewheelin Franklin
Freewheelin Franklin's picture

From what I understand, Google/Motorola is about to rain some serious runny shit on Apple.

"Go ahead, bite the Big Apple, don't mind the maggots."

Fri, 09/07/2012 - 20:28 | 2773610 Atomizer
Atomizer's picture

If Steve Jobs were alive today, the parasites running his company would be fired on the spot. I'm going to enjoy watching this stock cliff dive.

Fri, 09/07/2012 - 21:32 | 2773717 earleflorida
earleflorida's picture





4G/ LTE & 802.11

patent trolls IDCC & VHC rule

Fri, 09/07/2012 - 22:51 | 2773853 Uncle Remus
Uncle Remus's picture

Karma is a bitch.

Fuck'em all - it's time to go dark kids.

Sat, 09/08/2012 - 00:34 | 2773952 TerraHertz
TerraHertz's picture

I'm greatly enjoying the Apple vs Samsung patent wars, since I loathe Apple, Samsung and the entire patent/copyright system.

So it's win-win-win as far as I'm concerned. If there's any hope at all of destroying the current patent system (which is nothing but a giant millstone around the neck of technological advancement) it will come via a conflict like this. Two goliaths throwing every patent weapon they have at each other, and thus publicly exposing the patent laws as the insane pile of steaming garbage they are.


Here's an interesting article on how much better off we'd be without copyright/patents.
No Copyright Law
The Real Reason for Germany's Industrial Expansion?
By Frank Thadeusz

And some more:!_Copyright_DRM_links.txt

Sat, 09/08/2012 - 11:02 | 2774485 falanke
falanke's picture

HTC is a Taiwan company...  Taiwan folks don't like the Commie gov't.  They are like you... in it for the profits.  Thus the whole premise of this post is off. 


ZeroHedge sucks...   scaring investors by highlighting the negative and the false and being very wrong since 2009.

Sat, 09/08/2012 - 14:38 | 2774929 theprofromdover
theprofromdover's picture

Using the law of unintended consequences, perhaps Aapl will be forced to start manufacturing in USA if a trade and patent war starts up.

Also, didn't Palm originate the touch screen,they must hold important patents.


Mon, 09/10/2012 - 04:47 | 2777785 matrix2012
matrix2012's picture

Manufactured in USA and sold to Switzerland and those Petromonarchies. The Swiss and Saud people surely can afford its price and together make up a good volume of sales.

Sat, 09/08/2012 - 21:58 | 2775452 jtg
jtg's picture

Remember the runaway Toyota scam? Now we have a US court ruling for Apple and an Asian court ruling for Samsung. See the drift? Each region attempts to defend its own, no matter the law. The laws are only for us little people, the serfs.

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