Apple requested 40$ royalties for every samsung phone sold | Hacker News Reader

Apple requested 40$ royalties for every samsung phone sold

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34 pointsbluelu50 comments

Apple already eats up 71% of the mobile profits. Looks like they never forgot how to act like a monopoly in all these years and they like getting up on stage and playing all their 20 year old tunes:

http://en.wikipedia.org/wiki/Apple_Computer,_Inc._v._Microso...

http://en.wikipedia.org/wiki/Graphical_Environment_Manager#L...

Buying their products is saying, with your actual wallet, and your actual real money in completely unequivocal terms: "Yes, I fully support these blunt litigious anti-competitive tactics. Please do this more."

It's almost like a more evil serpent version of the Windows tax: http://en.wikipedia.org/wiki/Windows_refund#The_.22Windows_t...

What if Apple spent all this lawyer money instead on making a superior product that would beat their competitors, you know, because it was a better product, and not just go around and be the corporate Tonya Harding?

Not sure what you mean by "act like a monopoly". But you're right that Apple never forgot that microsoft ripped them off and dominated the industry with their sub par OS. (I know about the Xerox stuff). This is why Steve Jobs said very clearly at the iPhone launch "and boy have we patented it".

Many companies in the tech sector have effectively been using Apple as their R&D department for decades. Samsung is just the latest and most blatant.

you did see this http://i.imgur.com/KPGYL.jpg right? A large-screen candybar phone isn't really revolutionary. Nor is a touch-screen interface. I really don't know what you mean. Something with a web-browser? http://www.pocketpcfaq.com/wce/wceapps.htm A home-screen? http://reviews.cnet.com/smartphones/palm-treo-600-at/4505-64... An app store? http://reviews.cnet.com/4520-3504_7-5021267-1.html Face-time? http://en.wikipedia.org/wiki/File:Dell_Axim_X30_624.jpg

Nothing that Apple did was really that new ... they have never been the "new"; just the people that came up with the right marketing sauce to convince people to buy it; and that's just a US thing. US lagging behind in mobile tech was an on-going joke up until about 2007 because other companies had had run-away successes in the Asian and Europe markets already. Just nothing of that scale in the US.

There were touch-screen smartphones in 1994 http://en.wikipedia.org/wiki/File:IBM_Simon_Personal_Communi... ... Oftentimes there were widely available commercial equivalencies 10, 15, even 20 years prior to the Apple "Innovation" event. And then a few years later they (Apple) pretend like they invented and own all of it.

I don't see Palm or Rim or LG or Qualcomm or IBM or Sony or Nokia or Ericsson or even Microsoft going around and suing the pants of people in the Mobile space; even though they clearly have more of the prior art right than Apple does.

With Apple, suing people out of market has been their modus operandi at least since Lisa.

And I really don't know what you mean with the Microsoft comparison; you can do a very identical analysis with early 80s computer UIs ... from visicalc to desqview to deskmate to countless utility suites that did WIMP pre-lisa, some even graphically (e.g., wordperfect, wordstar)

You're right, it's ridiculous. What is an iPhone if not a combination of silicon, carbon, oxygen, aluminium, potassium, copper, boron, phosphorus, nitrogen etc.? Did Apple come up with any of these elements? Was it the first to bring them to market? With such prior art as clocks, wires, plants or rocks, going back lustra or even scores, it's a wonder their case has not been thrown out yet.

Apple aren't trying to claim exclusive use of any chemical elements that I'm aware of.

This isn't about whether or not Apple make good and/or innovative products. It's about their claim of exclusive rights to the concepts they use in building them.

Round shapes weren't uncommon until someone used it for displacing things, hence inventing the wheel.

Syncing data over a network wasn't unheard of as well, but then someone came with dropbox.

Nothing today is "really new", but the novelty is in the way this is put together and used.

There's a big difference between "uncommon" and "untried". Fact is, most of what Apple has popularized with their line of iDevices has already failed previously in the market. This just proves Apple's ability to iterate, perfect, and market their products. It has no bearing on how well they innovate.

There may well be something special about the packaging of a particular set of features, but that isn't the standard for patent.

And what would have happened if round shapes or syncing data over a network were patented and everyone who tried to reuse them in novel ways were aggressively sued?

So the Android OEMs are just sending Microsoft checks for each smartphone sold out of the goodness of their heart?

Downvoted you because you are just another anti-Apple troll. Apple succeeded where others had failed, usually by innovating and by relentless attention to detail. Consequently everyone else copies "what Apple did" in "the way that Apple did it". This "patenting round corners" BS is just nonsense spouted by the feeble minded who do not, or will not, understand the issues being tested by these court cases.

Samsung did not just copy one or two isolated design details, they copied the whole damn thing. Do not your let your fandroidism or anti-Apple bigotry blind you to the reailty of what is being contested here.

Downvoted because accusing someone of trolling when they (quite clearly) are being genuine is rather inane, and the name-calling doesn't help the standard of discussion here.

Apple already eats up 71% of the mobile profits.

You're making it sound like there's this big profit tree out there that everybody's supposed to get an fair share of. Nobody "eats up" profits. They earn them.

My apology ... that's a partial statement. They have 33% of the market and 71% of the profit.

Apple has the most profits with all other companies, except the one they are suing, selling at a loss. Yes, at a loss. http://www.bgr.com/2012/04/30/apple-samsung-take-profit/

The basis of these types of IP arguments is that the competitor can take short-cuts and thus price the originator out of market or at best make a much more handsome profit because they didn't have to do the R&D or some other type of fair-play argument line. You certainly don't have to prove that harm is being done for patent violation, but the idea is that such a system exists to stop it. If there's a sniff test here, the highest-profit-margin-in-the-industry Apple isn't passing it.

You can't view the market that simply.

Until recently Apple had no presence in the low end of the market which meant that a large proportion of the market that Samsung and other Android handset manufacturers had was in the budget sector. That part of the market is always less profitable on a per unit basis and more reliant on volume.

It is also arguably more competitive than the high end. Few Android handset manufacturers other than Samsung are making models that compare favourably with the iPhone, however down the bottom end there are loads of players (many fighting for their lives) cutting further into margins at those price points.

Interestingly Samsung, arguably the only Android manufacturer that does compete successfully at the top end is massively profitable itself.

But if Samsung and other choose to scrap it out in a low margin market, you can't really blame Apple when that strategy fails to realise the same profits and you can't really use it as any sort of justification.

They have 33% of the market including most of the high end and they design 1 new phone every 18 months or so. How much do you think R&D is going to cost them vs Samsung which comes out with a new model every month or so and has a smaller slice of the mid to low end market.

Perhaps the lesson to be learned is that Samsung should stop coming out with a new model every month.

> Apple already eats up 71% of the mobile profits.

How do you suppose they did that? With lawyers? I don't think so.

> What if Apple spent all this lawyer money instead on making a superior product that would beat their competitors

They already do. They didn't need this lawsuit to stay competitive.

If they don't need this litigation to stay competitive, I think it is natural to ask why they did need it.

It wasn't a matter of need. It was a matter of principle. If you spend billions of dollars in R&D to invent a device, and a competitor just copies it, then it stands to reason that they should pay loyalties for every one of theirs that is sold.

They didn't invent cell phones or touch screens. Apple is standing on the shoulders of giants.

If you read the documents, this is all about trade dress, which may be inspired by others but can be claimed as your own if you build a strong enough case.

Samsung's deliberate copying of the iPhone, as directed by management and documented quite extensively in the evidence, is the source of most of these problems. When you have Samsung saying "Make it more like the iPhone" you have problems.

They are not claiming to have invented cell phones or touch screens.

"What if Apple spent all this lawyer money instead on making a superior product that would beat their competitors, you know, because it was a better product [...]"

I think it's safe to assume they have enough money to develop new products and keep an army of lawyers fed and watered.

A monopoly position is not defined by share of profits.

Pricing power is a signal

The Ritz-Carlton charges high prices, but that doesn't mean they have a monopoly on hotel rooms.

A luxury vendor charging luxury prices is not necessarily high pricing power.

Should it be?

No.

Samsung and the other Korean phone companies used many anti-competitive tactics against foreign phone companies in South Korea. The original iPhone's introduction to South Korea was delayed, for instance. See articles I've linked in my history.

Samsung are an extremely unethical company. I try not to have anything to do with them whenever I can help it.

> What if Apple spent all this lawyer money instead on making a superior product that would beat their competitors, you know, because it was a better product, and not just go around and be the corporate Tonya Harding?

That's exactly what they did do with the iPhone. Samsung used their might to stop it from coming to South Korea and give themselves time to develop a knock-off of it.

I'm pretty sure when I buy an Apple product I'm saying "I like this thing you have made, please give it to me."

every? $30 for every _smartphone_, $40 for every _tablet_. Sounds decent for me as a starting point for negotiations, given that Microsoft is rumoredto collect $1 to $5 per Andorid phone (http://www.bbc.co.uk/news/technology-15427575), with the $5 probably for the higher end phones.

Shame you were downvoted for expressing a legitimate point.

Microsoft is charging $1 to $5 for I believe only 2 patents (FAT and Calendar event creation). And they in the eyes of the user (based on the research) aren't as 'valuable' as the UI patents.

Also Apple was proposing that royalty rate to be lowered by up to 100% in exchange for cross licensing.

Not 100% but 20% - read the presentation.

20% off for cross license.

40% off if OS developer already has a license from Apple (i.e. Microsoft OS).

20% off if not not a touch screen ('Not using proprietary features - specific features to be discussed' - basically not like an iPhone).

20% off if using an Apple Licensed Processor - (I don't know what this would be).

So realistically if cross license is assumed the real rate would be $24 for a Galaxy S type product, $12 for a WP7 (I don't think that the calculations on slide 18 are actually correct).

As mentioned this was the opening of the negotiation. I don't know the strength of the patent portfolio but IF it really is hard to bring a touchscreen phone to competitive level without those technologies these don't seem ridiculous prices to me.

If I were Samsung and assessed the patents as strong I would probably try to negotiate for:

1) Exclusion of lower end phones completely if no relevant patents applied.

2) Contractual commitment to get reduced rates if others get them.

3) Reduced rates or higher cross license discount.

"Also Apple was proposing that royalty rate to be lowered by up to 100% in exchange for cross licensing."

Where is your source?

actually Apple offered a "20 percent discount if Samsung agreed to cross-license its patents to Apple" and a further level of discount if "Samsung would stop using Apple’s most proprietary features".

http://www.macobserver.com/tmo/article/new_court_docs_reveal...

Microsoft seems to be charging anywhere between $7 and $15 per android device for their patents. ( http://www.zdnet.com/blog/microsoft/reality-check-microsoft-... ) So while Apple's fee is much higher, it seems fair to me that given the many obvious similarities a form of patent licensing would be in order.

They can request whatever they like. Doesn't mean they'll get it.

The document lays claim to "Java, OS and OO" as Apple innovations?

The iPhone popularized a lot of best-of-breed technologies. There were start-ups trying to do what the iPhone did. Apple is claiming those as Apple innovations. This is very similar to Apple popularizing the GUI invented at Xerox, and suing Microsoft.

If it's similar to Apple "popularizing" the GUI "invented" at Xerox then all power to Apple. Certainly, Apple took Xerox's ideas and ran with them, but the results went far beyond what Xerox had made. Microsoft simply took Apple's ideas and made a shoddy clone. See any similarity?

We -- at best -- stand on giants' shoulders. Making the facile argument that Samsung got stuff from Apple just like Apple got stuff from Xerox is skipping over very important details.

What ? Nowhere in the article did it imply that.

It meant some of the implementations of those rely on Apple innovations i.e. patents. Which given how old Apple is, all of the patent acquisitions along the way and some pretty innovative work by NeXT it isn't inconceivable.

Doesn't mean that those patents will be enforceable.

See slide #8 and the notes for slide #8.

Sounds fair. Samsung's 'designs' are total ripoffs of the iPhone anyway.

I don't think I've seen more bullshit graphs in one slide deck in my life.

Sorry Off-topic for the royalty request but relevant to the link.

Is it just me that runs with Noscript and finds scribd a real nuisance?

The linked page wants to run scripts from:

www.scribd.com

fonts1.scribdassets.com

s5.scribdassets.com

s6.scribdassets.com

rc.rlcdn.com

resources.infolinks.com

tap-cdn.rubiconproject.com

www.bkrtx.com

And you have to register to do the direct download. I would have thought that they could have rationalised their own use of domains to a single domain (plus subdomains) that could be authorised if I wished. The other four domains I've never heard of which makes me just want to get out of the site. Should I just trust them because scribd says that they trust them?

It's common to use a different (not sub) domain for static assets, especially when you use gigantic cookies in your web app. If the static assets aren't under access control, you usually don't need session information, etc to serve them properly. This saves time and bandwidth.

It's also common to spread assets across multiple hostsnames (typically subdomains that resolve to the same server) to parallelize loading by browsers.

So I try to give sites some leeway, but I agree about scribd. If I can't make the site work by allowing the primary domain and a CDN domain, I generally bail.

I never ever allow unknown domains like those above, especially on a site where I'm coming to view user-submitted content.

I trust the JavaScript sandbox well enough, but if I get to the point of having to wonder about the provenance of code delivered by a site I'm visiting, I'm usually too disgusted to bother continuing.

I know I've been downvoted (a first for me on HN - I guess for being offtopic but maybe because many people feel that I'm wrong to be objecting to this) but I also got it wrong, more sites are needed once you do allow scribd.com. All the non-scribd sites above seem to be tracking or analytics.

Additionally required after www.scribd.com has been permitted (I haven't allowed any of the advertising/tracking/SEO sites to run scripts to see if they have further dependencies):

twitter.com

p.chango.com

quantserve.com

beacon.newrelic.com - (I don't object to this one.)

www.googletagservices.com

If people think I am wrong to be uncomfortable with this sort of behaviour by a site please reply and try to change my mind.

I just really don't like the idea that websites feel free to allow half the advertising companies on the internet to know what individual* people are browsing and looking at.

Maybe I'm just too Web 1.0 and old fashioned to expect sites not to send me round the internet when I land on the page.

*Scribd may not be tracking who people are but the advertisers might be.

Scribd is truly a nuisance. No one needs their product and the price is too high (zero dollars plus all of the information they can mine from Facebook).

The title is not particularly accurate. Starting bid of 30 per phone with crops licensing discounts and discount for 'non infringing' phones. Non infringing being ones that apple did not consider to be outright copy of the iPhone trade dress and then quirky features.

Apple made enormous effort to differentiate the product and give it a personality. Samsung did not just try to match the features the old ones looked like copies.

Reply on news.ycombinator.com