Apple patent claims stifling innovation; Japan court rules in favour of Samsung

Is Apple stifling innovation?

A US jury decision against Samsung and a Japanese court decision for the Korean conglomerate raise questions over the entire patent issue

WOULD anyone have expected the Apple-Samsung case to be decided in favour of Samsung by a US court in a jury verdict and against Apple, which is by now even more American than apple pie? I certainly didn’t.

But there is an appeal on the cards and it is still anyone’s guess if Apple will be allowed to claim such things as shape and “pinch to zoom out” as its right. But if it is, then that’s a big setback for other smartphones.

Samsung, however, scored a victory in a Tokyo court which ruled yesterday that the Korean electronics giant, and supplier to Apple, did not violate any patents. That victory will no doubt raise questions as to how fair the US jury was in making an award in favour of Apple, including US$1bil in damages.

The US decision means eventually consumers there may have to pay more for Apple’s iPhone, iPod and devices because others may not be able to emulate features that may have made their devices a success. That will have repercussions on prices elsewhere as well.

In the motor industry there have been many trends in shape over the years, moving from angular to rounded designs. If some car company had decided to sue every other car manufacturer for a similar look and feel and succeeded, car shapes may have had great difficulty evolving.

But the best manufacturers of cars did not. In fact some of them deliberately did not register safety patents just so that others could use the innovations to increase passenger safety.

If Samsung is said to have infringed on shape, then there are a number of other manufacturers who are in trouble too. Rectangular faces with rounded edges are a natural evolution in the mobile phone industry. Certainly, other manufacturers are going to hope there will be a reversal on appeal.

Apple did not invent the touch screen. Thus, it seems strange that it has a patent to “pinch to zoom” which is basically one way of many ways to use a screen. That’s like patenting a particular method of driving a car!

Apple has already followed up on its US victory, seeking an injunction to prevent Samsung from selling eight of its smartphones in the United States including some in the best-selling Galaxy range.

However, hearing of the injunction will only be in December and some of Samsung’s models may be phased out by then, which offers some consolation for Samsung.

Some US commentators view the case as a proxy war against another US company Google which makes the Android operating system used in Samsung, HTC and other smartphones.

An article in the San Francisco Chronicle says that the late Apple chief executive Steve Jobs was once a friend of Google’s co-founders but considered Google’s move into mobile a betrayal that demanded revenge.

“I’m going to destroy Android, because it’s a stolen product,” he told his biographer Walter Isaacson. “I’m willing to go thermonuclear war on this.”

But despite the nice rhetoric, revenge from the grave it is not. Apple’s strategy seems quite clear cut. Patent everything. Then tie up competitors in court if there is any semblance of product infringement and keep its competitive advantage intact as long as possible.

Reports put its profit margins on its iPhone at as high as 50%, a huge mark-up in a cutthroat market which it has been able to achieve by parlaying an excellent product with some very deft marketing and public relations.

That made it the biggest company in the world. Many would say that the product, however, is not necessarily the best anymore if ever it was, especially since competitors are fast catching up with their own nifty designs and features. And marketing and PR too – Galaxy is getting a name for itself and no doubt the cases around the world will help.

Thus it makes much economic sense for Apple to prolong this by any legal means it can for as long as possible. Does Apple care that it may be stifling innovation, raising costs and hurting consumers in the process?

Probably not. And why should it? It is a company based on the profit motive. But it needs to remember that all publicity is not good publicity and if it gets a reputation as a bully, its entire image and that of its products could change.

American companies can carry this patent thing too far and they have. Recall a few years ago when some of them tried to patent the production of pesticides from neem trees. For thousands of years, extracts from the leaves of the neem have been used for precisely that.

The American jury system cannot but be expected to favour a US icon such as Apple which is seen as brash, innovative and successful, the very image of the US itself. But that’s not going to be the case in the rest of the world. And even in the US, if learned judges make the decisions instead of a jury, the results may well be different.

Really, no one is going to benefit and there may well be detriment, if we allow patents to get the better of us and stifle innovation and hinder the development of new products and services at lower costs.
It would be a travesty of sorts and ironic indeed if Apple is now seen as a technology inhibitor instead. Beware!

A QUESTION OF BUSINESS By P. GUNASEGARAM starbiz@thestar.com.my

P Gunasegaram is an iPhone user but only because the service provider gave such a good deal.

 Japanese court rules for Samsung over Apple

In this Aug. 25, 2011 file photo a lawyer holds an Apple iPad and a Samsung Tablet-PC at a court in Duesseldorf, Germany. The Duesseldorf state court ruled Tuesday, Jan. 31, 2012, that neither the South Korean company‘s Galaxy Tab 10.1 nor the Galaxy Tab 8.9 could be sold in Germany because they were in violation of unfair competition laws. A German appeals court has upheld a decision prohibiting Samsung Electronics Co. from selling two of its tablet computers in Germany, agreeing with Apple Inc. that they too closely resemble the iPad2. (AP)

Samsung wins one battle in the multinational conflict over patent and innovation

By Jeong Nam-ku, Tokyo correspondent

A Japanese court has ruled in favor of Samsung over Apple in a patent lawsuit. In the August 31 verdict, Tamotsu Shoji, the Tokyo District judge, declined Apple’s claim that “8 models of Samsung Galaxy series infringed on Apple’s patents.”

Apple had sued Samsung for infringing on its synchronization of music and other data with remote servers. It asserted that “Samsung’s products use Apple’s technologies of synchronization, which constitutes patent infringement,” and demanded both compensation of 100 million Japanese Yen (around US$1.27 million) and a block on eight Samsung products.

According to Jiji Press, judge Tamotsu stated, “Samsung’s products are technologically distinct from Apple and can’t be considered infringements.”

As a first trial, this does not hold much importance beyond being an indication of what the final verdict might end up being. However, because the verdict ordered a ‘dismissal’ on Apple’s injunction, there is only a slight possibility for an overturn in the final verdict.

Apple has also sued Samsung for infringing on its ‘bounce back (technology that springs back when the document has reached the end)’ patent, a claim that is still ongoing.

This verdict is the first ruling out of the 9 lawsuits Apple and Samsung Electronics have against each other. Samsung also filed lawsuits against Apple in April and October of 2011, arguing that Apple also infringed on 6 of Samsung’s patents.

Samsung and Apple have ongoing lawsuits in different 10 countries. In the US, a judge ruled that Samsung had infringed Apple patents, ordering the Korean electronics giant to pay $1.05 billion in damages.  

Translated by Yoo Hey-rim, Hankyoreh English intern

Related posts:
Apple's rot starts with its Samsung lawsuit win 
Apple wins $1bn in US while Samsung wins in Korea; it may reshape the free Google Android system 
US Stocks dominate; Korean share drops after US's ruling on Apple-Samsung patent wars 
The US Pacific free trade deal that's anything but free? 
US launches financial attacks against its allies! 

Apple patent claims stifling innovation; Japan court rules in favour of Samsung

Is Apple stifling innovation?

A US jury decision against Samsung and a Japanese court decision for the Korean conglomerate raise questions over the entire patent issue

WOULD anyone have expected the Apple-Samsung case to be decided in favour of Samsung by a US court in a jury verdict and against Apple, which is by now even more American than apple pie? I certainly didn’t.

But there is an appeal on the cards and it is still anyone’s guess if Apple will be allowed to claim such things as shape and “pinch to zoom out” as its right. But if it is, then that’s a big setback for other smartphones.

Samsung, however, scored a victory in a Tokyo court which ruled yesterday that the Korean electronics giant, and supplier to Apple, did not violate any patents. That victory will no doubt raise questions as to how fair the US jury was in making an award in favour of Apple, including US$1bil in damages.

The US decision means eventually consumers there may have to pay more for Apple’s iPhone, iPod and devices because others may not be able to emulate features that may have made their devices a success. That will have repercussions on prices elsewhere as well.

In the motor industry there have been many trends in shape over the years, moving from angular to rounded designs. If some car company had decided to sue every other car manufacturer for a similar look and feel and succeeded, car shapes may have had great difficulty evolving.

But the best manufacturers of cars did not. In fact some of them deliberately did not register safety patents just so that others could use the innovations to increase passenger safety.

If Samsung is said to have infringed on shape, then there are a number of other manufacturers who are in trouble too. Rectangular faces with rounded edges are a natural evolution in the mobile phone industry. Certainly, other manufacturers are going to hope there will be a reversal on appeal.

Apple did not invent the touch screen. Thus, it seems strange that it has a patent to “pinch to zoom” which is basically one way of many ways to use a screen. That’s like patenting a particular method of driving a car!

Apple has already followed up on its US victory, seeking an injunction to prevent Samsung from selling eight of its smartphones in the United States including some in the best-selling Galaxy range.

However, hearing of the injunction will only be in December and some of Samsung’s models may be phased out by then, which offers some consolation for Samsung.

Some US commentators view the case as a proxy war against another US company Google which makes the Android operating system used in Samsung, HTC and other smartphones.

An article in the San Francisco Chronicle says that the late Apple chief executive Steve Jobs was once a friend of Google’s co-founders but considered Google’s move into mobile a betrayal that demanded revenge.

“I’m going to destroy Android, because it’s a stolen product,” he told his biographer Walter Isaacson. “I’m willing to go thermonuclear war on this.”

But despite the nice rhetoric, revenge from the grave it is not. Apple’s strategy seems quite clear cut. Patent everything. Then tie up competitors in court if there is any semblance of product infringement and keep its competitive advantage intact as long as possible.

Reports put its profit margins on its iPhone at as high as 50%, a huge mark-up in a cutthroat market which it has been able to achieve by parlaying an excellent product with some very deft marketing and public relations.

That made it the biggest company in the world. Many would say that the product, however, is not necessarily the best anymore if ever it was, especially since competitors are fast catching up with their own nifty designs and features. And marketing and PR too – Galaxy is getting a name for itself and no doubt the cases around the world will help.

Thus it makes much economic sense for Apple to prolong this by any legal means it can for as long as possible. Does Apple care that it may be stifling innovation, raising costs and hurting consumers in the process?

Probably not. And why should it? It is a company based on the profit motive. But it needs to remember that all publicity is not good publicity and if it gets a reputation as a bully, its entire image and that of its products could change.

American companies can carry this patent thing too far and they have. Recall a few years ago when some of them tried to patent the production of pesticides from neem trees. For thousands of years, extracts from the leaves of the neem have been used for precisely that.

The American jury system cannot but be expected to favour a US icon such as Apple which is seen as brash, innovative and successful, the very image of the US itself. But that’s not going to be the case in the rest of the world. And even in the US, if learned judges make the decisions instead of a jury, the results may well be different.

Really, no one is going to benefit and there may well be detriment, if we allow patents to get the better of us and stifle innovation and hinder the development of new products and services at lower costs.
It would be a travesty of sorts and ironic indeed if Apple is now seen as a technology inhibitor instead. Beware!

A QUESTION OF BUSINESS By P. GUNASEGARAM starbiz@thestar.com.my

P Gunasegaram is an iPhone user but only because the service provider gave such a good deal.

 Japanese court rules for Samsung over Apple

In this Aug. 25, 2011 file photo a lawyer holds an Apple iPad and a Samsung Tablet-PC at a court in Duesseldorf, Germany. The Duesseldorf state court ruled Tuesday, Jan. 31, 2012, that neither the South Korean company‘s Galaxy Tab 10.1 nor the Galaxy Tab 8.9 could be sold in Germany because they were in violation of unfair competition laws. A German appeals court has upheld a decision prohibiting Samsung Electronics Co. from selling two of its tablet computers in Germany, agreeing with Apple Inc. that they too closely resemble the iPad2. (AP)

Samsung wins one battle in the multinational conflict over patent and innovation

By Jeong Nam-ku, Tokyo correspondent

A Japanese court has ruled in favor of Samsung over Apple in a patent lawsuit. In the August 31 verdict, Tamotsu Shoji, the Tokyo District judge, declined Apple’s claim that “8 models of Samsung Galaxy series infringed on Apple’s patents.”

Apple had sued Samsung for infringing on its synchronization of music and other data with remote servers. It asserted that “Samsung’s products use Apple’s technologies of synchronization, which constitutes patent infringement,” and demanded both compensation of 100 million Japanese Yen (around US$1.27 million) and a block on eight Samsung products.

According to Jiji Press, judge Tamotsu stated, “Samsung’s products are technologically distinct from Apple and can’t be considered infringements.”

As a first trial, this does not hold much importance beyond being an indication of what the final verdict might end up being. However, because the verdict ordered a ‘dismissal’ on Apple’s injunction, there is only a slight possibility for an overturn in the final verdict.

Apple has also sued Samsung for infringing on its ‘bounce back (technology that springs back when the document has reached the end)’ patent, a claim that is still ongoing.

This verdict is the first ruling out of the 9 lawsuits Apple and Samsung Electronics have against each other. Samsung also filed lawsuits against Apple in April and October of 2011, arguing that Apple also infringed on 6 of Samsung’s patents.

Samsung and Apple have ongoing lawsuits in different 10 countries. In the US, a judge ruled that Samsung had infringed Apple patents, ordering the Korean electronics giant to pay $1.05 billion in damages.  

Translated by Yoo Hey-rim, Hankyoreh English intern

Related posts:
Apple's rot starts with its Samsung lawsuit win 
Apple wins $1bn in US while Samsung wins in Korea; it may reshape the free Google Android system 
US Stocks dominate; Korean share drops after US's ruling on Apple-Samsung patent wars 
The US Pacific free trade deal that's anything but free? 
US launches financial attacks against its allies! 

US Stocks dominate; Korean share drops after US's ruling on Apple-Samsung patent wars

US ascends in biggest stocks as Google, Apple oust Gazprom

Shares of Apple have hit new record highs after the company won its patent lawsuit against Samsung, but overall stocks traded mixed.

• Image Credit: AP
• Apple Inc., International Business Machines Corp., Wells Fargo & Co. and four more US companies joined the top 20 since stocks peaked in 2007, bringing the total to 14, according to data compiled by Bloomberg

New York: American stocks are dominating global equities by the most in a decade, taking a majority of the spots in a ranking of the 20 biggest companies, after earnings rose faster than the rest of the world as the global economy rebounded.

Apple Inc., International Business Machines Corp., Wells Fargo & Co. and four more US companies joined the top 20 since stocks peaked in 2007, bringing the total to 14, according to data compiled by Bloomberg. They replaced Moscow-based Gazprom OAO, China Petroleum & Chemical Corp. in Beijing, Petroleo Brasileiro SA of Rio de Janeiro and six others from Europe and Asia. Of the nine added, only BHP Billiton Ltd. and Nestle SA are based outside the US.

More US corporations are represented than any time since 2003 after 10 quarters of economic expansion and profit growth lifted the Standard & Poor’s 500 Index 109 per cent since shares bottomed in March 2009. The shift reflects volatility in emerging markets and shows how innovation builds value in the US.

“The US is just the best place on the planet to have a great idea and turn it into a big business,” according to Michael Shaoul, chairman of New York-based Marketfield Asset Management, which oversees $2.7 billion (Dh9.9 billion).

“There’s another reason for this list to have shifted and that is the falling of prior darlings,” Shaoul said. “A lot of the ones which have fallen are energy and emerging-market related.”

Reasons for strength

American companies are gaining strength in part because of Europe’s sovereign debt crisis. While the S&P 500 fell 0.5 per cent last week to 1,411.13, retreating from a four-year high, amid concern European leaders will fail to preserve the 17-nation currency union, the Euro Stoxx 50 Index slid 1.5 per cent. S&P 500 futures added 0.1 per cent to 1,410.6 at 8.52am in London on Monday.

Computer and software makers became the top industry in the S&P 500, overtaking financial companies, as Apple and IBM joined Google Inc. and Microsoft Corp. among the biggest stocks. The last time a non-US technology producer made the global ranking was in 2001, when Finland-based Nokia Oyj was the world’s largest mobile phone maker. Nokia’s market value has fallen by 92 per cent since Apple introduced the iPhone in 2007.

The Cupertino, California-based maker of iPad computers last week became the most valuable US company ever as the stock rose to $668.87 on August 22, giving the company a value of $627 billion. Apple, which approached bankruptcy in 1997, has jumped more than 80-fold in the past decade.

IBM’s market value more than doubled over the decade as the company shifted its strategy toward more profitable software sales and away from hardware and consulting. The New York-based company, with a market capitalisation of $226 billion, closed the gap with Microsoft, valued at $256.2 billion, to become the No. 3 technology maker and the world’s seventh-biggest company.

Microsoft, based in Redmond, Washington, was worth four times as much as IBM in 1999. Mountain View, California-based Google, owner of the world’s most popular search engine, is valued at $222.6 billion.

No match to Apple, Google

“There are not a lot of other companies that can compete with the Googles and the Apples of the world,” Jeffrey Saut, chief investment strategist at Raymond James & Associates in St. Petersburg, Florida, said. “We have probably the most cutting-edge companies in the technology space that exist today. Who can match Apple? I can’t think of anybody.”

Computer and software makers represent 20 per cent of the S&P 500. The industry’s weighting outside the US is 4 per cent, as measured by the MSCI World ex-US Index.

Profit growth drove the US gains. The 14 biggest US companies earned $248.4 billion in the last 12 months, more than double the total made by the 67 companies in Brazil’s Bovespa Index. Their market value reached $3.57 trillion, about the size of Germany’s 2011 gross domestic product.

Earnings at the seven newly added American companies surged 40 per cent during the past four years, while income for the 13 non-US firms that made the 2007 list rose 6 per cent, data compiled by Bloomberg show.

The ranking reflects the US economy, where growth climbed back toward pre-2008 levels faster than other countries. Gross domestic product is forecast to gain 2.2 per cent this year, according to the median estimate of 78 economists surveyed by Bloomberg. That compares with an average of 2.6 per cent between 2002 and 2007, before the credit crisis, the data show.

Growth declines elsewhere

China is projected to expand by 8.1 per cent, compared with its mean rate of 11.2 per cent before the global recession. Brazil’s GDP may increase 1.9 per cent, down from an average of 3.8 per cent. Russia may grow by 3.8 per cent, next to 7.1 per cent in the five years before the credit crisis.

“People perceive not only better growth for the US, but also less risk,” Chris Leavy, the chief investment officer of fundamental equities at New York-based BlackRock Inc., which oversees $3.56 trillion as the world’s biggest money manager, said in an August 22 interview.

Investors are demanding more profit to reward companies with higher stock prices than before the credit crisis shattered confidence in equities. The average capitalisation of the largest 20 companies shrunk 17 per cent to $242.5 billion since 2007 even as profits surged almost fourfold to $18.8 billion, data compiled by Bloomberg show.

The biggest companies, dominated in 2007 by commodity explorers and enterprises controlled by China’s government, traded at an average price-earnings ratio of 57.6, the data show. Today, after the addition of two American technology developers and a California bank, the average valuation is 12.9, according to the data.

“It’s so commonplace in this country to vilify corporations, but the truth is the American corporate structure has worked very well,” David Kelly, chief market strategist at JPMorgan Funds in New York, said in an August 22 phone interview. His firm oversees about $348 billion. “There are other countries which are doing very well economically, but don’t do as good a job as inventing and reinventing themselves.”

The S&P 500 trailed the rest of the world in the previous bull market as accelerating growth in China boosted demand for commodities from Brazil to Russia. The index rose 99 per cent during the five-year rally that ended in October 2007, lagging behind a 187 per cent gain by the MSCI World ex-US Index and a 416 per cent surge in an MSCI gauge tracking 21 emerging markets. - Bloomberg

Samsung share price drops on Apple patent ruling

How South Koreans view Samsung ruling

STORY HIGHLIGHTS

• NEW The share price of Samsung Electronics dropped nearly 7.5% in trading Monday
• Comes after a California jury awarded Apple $1.05 billion in a patent dispute with Samsung
• The tumble erased about $12 billion from the South Korean electronics giant's market value

(CNN) -- The share price of Samsung Electronics dropped nearly 7.5% in trading Monday as investors had their first opportunity to react to the more than $1 billion decision against the Korean electronics giant by a California jury for infringing on Apple patents.

Samsung dropped 6.3% at the open of South Korea's Kospi index and finished the day down 7.45%, after dropping as much as 7.7%. The tumble erased about $12 billion from the company's market value Monday.

Samsung is planning to appeal Friday's decision of a U.S. federal jury which awarded Apple $1.05 billion for copying the look and feel of iPhones and iPad design. The jury rejected Samsung's counterclaims against Apple.

A senior Samsung executive told the Korea Times the decision was "absolutely the worst scenario for us" as he was heading into an emergency meeting at the company's Seoul headquarters on Sunday.

The decision could lead to the prohibition of sales in the U.S. of Samsung smarphones and computer tablets found to have violated Apple's patents. A hearing on the matter is scheduled for September 20.

Apple vs. Samsung: Tale of two countries

CNNMoney: What the Apple-Samsung verdict means for your smartphone

"As far as the money damages are concerned, (Samsung) will make that up in the long run. The bigger issue at the moment them having to come up with new and unique designs appealing to the customer base," said Christopher Carani, chairman of the design rights committee of the American Bar Association.

"It will lead to fewer choices, less innovation, and potentially higher prices," Samsung said in a written statement after Friday's decision. "It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies."

Apple, meanwhile, praised the court for "sending a loud and clear message that stealing isn't right."

"The mountain of evidence presented during the trial showed that Samsung's copying went far deeper than even we knew," the company said in a statement.

A nine-person jury spent just two and a half days puzzling out its final verdict, with weeks of notes and memories of testimony, 109 pages of jury instructions, and boxes of evidence including a collection of contested smartphones and tablets as their guide.

The jury award shows the growing importance of design for electronics makers. In 2001, Apple and Samsung were awarded 10 and eight U.S. design patents, respectively. This year, Apple could have as many as 333 design patents approved, while Samsung could have as many as 500, Carani said.

"Central to the U.S. case and at its very core was design rights, the way things look, and that's really where the large amount of this billion-dollar damages judgment comes from," Carani said.

The lawsuit is the largest yet in the ongoing worldwide patent brawl between the two companies, which itself is just one battle in Apple's war against Google's Android mobile operating system. On Friday, a South Korean court found that both parties had infringed on each other's patents, banning the sale of the iPhone 3GS, iPhone 4, two iPad models and Samsung's Galaxy S2.

The Korean court ordered Apple to pay Samsung $35,000 and Samsung to pay Apple $22,000.

Related posts:
Apple wins $1bn in US while Samsung wins in Korea; it may reshape the free Google Android system
US launches financial attacks against its allies!

US Stocks dominate; Korean share drops after US's ruling on Apple-Samsung patent wars

US ascends in biggest stocks as Google, Apple oust Gazprom

Shares of Apple have hit new record highs after the company won its patent lawsuit against Samsung, but overall stocks traded mixed.

• Image Credit: AP
• Apple Inc., International Business Machines Corp., Wells Fargo & Co. and four more US companies joined the top 20 since stocks peaked in 2007, bringing the total to 14, according to data compiled by Bloomberg

New York: American stocks are dominating global equities by the most in a decade, taking a majority of the spots in a ranking of the 20 biggest companies, after earnings rose faster than the rest of the world as the global economy rebounded.

Apple Inc., International Business Machines Corp., Wells Fargo & Co. and four more US companies joined the top 20 since stocks peaked in 2007, bringing the total to 14, according to data compiled by Bloomberg. They replaced Moscow-based Gazprom OAO, China Petroleum & Chemical Corp. in Beijing, Petroleo Brasileiro SA of Rio de Janeiro and six others from Europe and Asia. Of the nine added, only BHP Billiton Ltd. and Nestle SA are based outside the US.

More US corporations are represented than any time since 2003 after 10 quarters of economic expansion and profit growth lifted the Standard & Poor’s 500 Index 109 per cent since shares bottomed in March 2009. The shift reflects volatility in emerging markets and shows how innovation builds value in the US.

“The US is just the best place on the planet to have a great idea and turn it into a big business,” according to Michael Shaoul, chairman of New York-based Marketfield Asset Management, which oversees $2.7 billion (Dh9.9 billion).

“There’s another reason for this list to have shifted and that is the falling of prior darlings,” Shaoul said. “A lot of the ones which have fallen are energy and emerging-market related.”

Reasons for strength

American companies are gaining strength in part because of Europe’s sovereign debt crisis. While the S&P 500 fell 0.5 per cent last week to 1,411.13, retreating from a four-year high, amid concern European leaders will fail to preserve the 17-nation currency union, the Euro Stoxx 50 Index slid 1.5 per cent. S&P 500 futures added 0.1 per cent to 1,410.6 at 8.52am in London on Monday.

Computer and software makers became the top industry in the S&P 500, overtaking financial companies, as Apple and IBM joined Google Inc. and Microsoft Corp. among the biggest stocks. The last time a non-US technology producer made the global ranking was in 2001, when Finland-based Nokia Oyj was the world’s largest mobile phone maker. Nokia’s market value has fallen by 92 per cent since Apple introduced the iPhone in 2007.

The Cupertino, California-based maker of iPad computers last week became the most valuable US company ever as the stock rose to $668.87 on August 22, giving the company a value of $627 billion. Apple, which approached bankruptcy in 1997, has jumped more than 80-fold in the past decade.

IBM’s market value more than doubled over the decade as the company shifted its strategy toward more profitable software sales and away from hardware and consulting. The New York-based company, with a market capitalisation of $226 billion, closed the gap with Microsoft, valued at $256.2 billion, to become the No. 3 technology maker and the world’s seventh-biggest company.

Microsoft, based in Redmond, Washington, was worth four times as much as IBM in 1999. Mountain View, California-based Google, owner of the world’s most popular search engine, is valued at $222.6 billion.

No match to Apple, Google

“There are not a lot of other companies that can compete with the Googles and the Apples of the world,” Jeffrey Saut, chief investment strategist at Raymond James & Associates in St. Petersburg, Florida, said. “We have probably the most cutting-edge companies in the technology space that exist today. Who can match Apple? I can’t think of anybody.”

Computer and software makers represent 20 per cent of the S&P 500. The industry’s weighting outside the US is 4 per cent, as measured by the MSCI World ex-US Index.

Profit growth drove the US gains. The 14 biggest US companies earned $248.4 billion in the last 12 months, more than double the total made by the 67 companies in Brazil’s Bovespa Index. Their market value reached $3.57 trillion, about the size of Germany’s 2011 gross domestic product.

Earnings at the seven newly added American companies surged 40 per cent during the past four years, while income for the 13 non-US firms that made the 2007 list rose 6 per cent, data compiled by Bloomberg show.

The ranking reflects the US economy, where growth climbed back toward pre-2008 levels faster than other countries. Gross domestic product is forecast to gain 2.2 per cent this year, according to the median estimate of 78 economists surveyed by Bloomberg. That compares with an average of 2.6 per cent between 2002 and 2007, before the credit crisis, the data show.

Growth declines elsewhere

China is projected to expand by 8.1 per cent, compared with its mean rate of 11.2 per cent before the global recession. Brazil’s GDP may increase 1.9 per cent, down from an average of 3.8 per cent. Russia may grow by 3.8 per cent, next to 7.1 per cent in the five years before the credit crisis.

“People perceive not only better growth for the US, but also less risk,” Chris Leavy, the chief investment officer of fundamental equities at New York-based BlackRock Inc., which oversees $3.56 trillion as the world’s biggest money manager, said in an August 22 interview.

Investors are demanding more profit to reward companies with higher stock prices than before the credit crisis shattered confidence in equities. The average capitalisation of the largest 20 companies shrunk 17 per cent to $242.5 billion since 2007 even as profits surged almost fourfold to $18.8 billion, data compiled by Bloomberg show.

The biggest companies, dominated in 2007 by commodity explorers and enterprises controlled by China’s government, traded at an average price-earnings ratio of 57.6, the data show. Today, after the addition of two American technology developers and a California bank, the average valuation is 12.9, according to the data.

“It’s so commonplace in this country to vilify corporations, but the truth is the American corporate structure has worked very well,” David Kelly, chief market strategist at JPMorgan Funds in New York, said in an August 22 phone interview. His firm oversees about $348 billion. “There are other countries which are doing very well economically, but don’t do as good a job as inventing and reinventing themselves.”

The S&P 500 trailed the rest of the world in the previous bull market as accelerating growth in China boosted demand for commodities from Brazil to Russia. The index rose 99 per cent during the five-year rally that ended in October 2007, lagging behind a 187 per cent gain by the MSCI World ex-US Index and a 416 per cent surge in an MSCI gauge tracking 21 emerging markets. - Bloomberg

Samsung share price drops on Apple patent ruling

How South Koreans view Samsung ruling

STORY HIGHLIGHTS

• NEW The share price of Samsung Electronics dropped nearly 7.5% in trading Monday
• Comes after a California jury awarded Apple $1.05 billion in a patent dispute with Samsung
• The tumble erased about $12 billion from the South Korean electronics giant's market value

(CNN) -- The share price of Samsung Electronics dropped nearly 7.5% in trading Monday as investors had their first opportunity to react to the more than $1 billion decision against the Korean electronics giant by a California jury for infringing on Apple patents.

Samsung dropped 6.3% at the open of South Korea's Kospi index and finished the day down 7.45%, after dropping as much as 7.7%. The tumble erased about $12 billion from the company's market value Monday.

Samsung is planning to appeal Friday's decision of a U.S. federal jury which awarded Apple $1.05 billion for copying the look and feel of iPhones and iPad design. The jury rejected Samsung's counterclaims against Apple.

A senior Samsung executive told the Korea Times the decision was "absolutely the worst scenario for us" as he was heading into an emergency meeting at the company's Seoul headquarters on Sunday.

The decision could lead to the prohibition of sales in the U.S. of Samsung smarphones and computer tablets found to have violated Apple's patents. A hearing on the matter is scheduled for September 20.

Apple vs. Samsung: Tale of two countries

CNNMoney: What the Apple-Samsung verdict means for your smartphone

"As far as the money damages are concerned, (Samsung) will make that up in the long run. The bigger issue at the moment them having to come up with new and unique designs appealing to the customer base," said Christopher Carani, chairman of the design rights committee of the American Bar Association.

"It will lead to fewer choices, less innovation, and potentially higher prices," Samsung said in a written statement after Friday's decision. "It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies."

Apple, meanwhile, praised the court for "sending a loud and clear message that stealing isn't right."

"The mountain of evidence presented during the trial showed that Samsung's copying went far deeper than even we knew," the company said in a statement.

A nine-person jury spent just two and a half days puzzling out its final verdict, with weeks of notes and memories of testimony, 109 pages of jury instructions, and boxes of evidence including a collection of contested smartphones and tablets as their guide.

The jury award shows the growing importance of design for electronics makers. In 2001, Apple and Samsung were awarded 10 and eight U.S. design patents, respectively. This year, Apple could have as many as 333 design patents approved, while Samsung could have as many as 500, Carani said.

"Central to the U.S. case and at its very core was design rights, the way things look, and that's really where the large amount of this billion-dollar damages judgment comes from," Carani said.

The lawsuit is the largest yet in the ongoing worldwide patent brawl between the two companies, which itself is just one battle in Apple's war against Google's Android mobile operating system. On Friday, a South Korean court found that both parties had infringed on each other's patents, banning the sale of the iPhone 3GS, iPhone 4, two iPad models and Samsung's Galaxy S2.

The Korean court ordered Apple to pay Samsung $35,000 and Samsung to pay Apple $22,000.

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Google+ launches vanity URLs, catching up to Facebook, Twitter

The tech giant starts rolling out custom URLs for certain brands and users, like +britneyspears and +toyota. Now, memorizing those long strings of numbers could be a thing of the past.

Both Twitter and Facebook have offered vanity URLs personalized to users' accounts for years -- something that has been glaringly vacant in Google Plus' URLs. But, that's about to change.

Google's social network announced today that vanity URLs for profiles and pages are on their way. It has even begun rolling out a few for celebrities, like soccer player David Beckham and pop singer Britney Spears, along with brands like Toyota, Delta, and Hugo Boss.

Here's what Google product manager Saurabh Sharma wrote in a blog post today:

Your Google+ profile is a place for you to share your passions with the millions of people who come to Google each day...Today we're introducing custom URLs to make it even easier for people to find your profile on Google+. A custom URL is a short, easy to remember web address that links directly to your profile or page on Google+. 

Sharma writes that at first just a few "verified profiles and pages" will get custom URLs, but eventually they will be offered to "many more" people and brands around the world. It's not clear how Google is choosing who is "verified" and who isn't and the timeframe for the greater inclusion of vanity URLs.

This is likely welcome news for most Google+ users since memorizing long strings of numbers isn't exactly easy. For example, CNET's Google+ URL is https://plus.google.com/105198124856956810263/posts. But wouldn't https://plus.google.com/+CNET be much more manageable?

In other Google+ news, the social network also announced today that it is launching a new audio setting for hangouts called "Studio Mode," which optimizes sound specifically for music. Beforehand, hangout sound was tweaked for conversations; but now by clicking settings and switching from "Voice" to "Studio Mode," music should sound more like a live concert than a video conference.

"Since we launched Google+ a little over a year ago, we've seen a thriving community of musicians connect with fans in really cool ways," Google product manager Matthew Leske wrote in a blog post today. "In particular: singer/songwriters like +Daria Musk, bands like +Suite 709, and many others are using Hangouts On Air to perform live for global audiences, and jam with fans face-to-face."

by Dara Kerr C/Net news

Dara Kerr, a freelance journalist based in the Bay Area, is fascinated by robots, supercomputers and Internet memes. When not writing about technology and modernity, she likes to travel to far-off countries.  

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Google gets the Baidu blues again after mapping losses

Chinese rival set to overtake Google Maps

Google looks like being beaten again in China, as Baidu leaps ahead in the mobile mapping space.

The text ads giant was still second in the Quarterly Survey of China's Mobile Map Client Market, but only just, according to Beijing-based Analysys International.

Chinese player Autonavi was the market leader by a long way, with 25.7 per cent, and Google Maps came in second with 17.5 per cent, but had Baidu breathing down its neck in third with a 17.3 per cent share.

The momentum is with the Chinese search firm too – Baidu Maps' market share rose from 13.6 per cent in Q1 to 17.3 per cent in Q2 while Google’s fell from 23.2 per cent. As a result, Baidu is predicted to supplant Google in the current quarter.

To add to Google’s woes, the analyst said local users were having problems updating their version of its mapping client, while Apple is set to drop Google Maps as a pre-install on the next version of iOS, with reports suggesting Cupertino is working with Autonavi now in the region.

“If the above problems are not solved quickly, it's hard for Google map to reverse the situation,” wrote Analysys International in a blog post.

Baidu and Google are of course old foes in the search space, where the home-grown firm routed its Californian rival after Google moved its search servers to Hong Kong in 2010 over censorship concerns.

Google's market share is now around 16 per cent while Baidu dominates with around 78 per cent.

The mobile map market in China is growing at a staggering pace, jumping 206 per cent year-on-year last quarter to 229 million accounts, according to Analysys International.

The analyst predicted it would be a key battle ground for the next phase of the mobile internet given that maps and associated apps are closely tied to up to a quarter of mobile advertising. ®

By Phil Muncaster 
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New Internet top-level domain name claims

Icann reveals new internet top-level domain name claims

Icann has received applications for .music, .miami, .insurance and .online among others

US-based organisations accounted for nearly half of all applications for new net address endings, according to the body in charge of the expansion.

The Internet Corporation for Assigned Names and Numbers (Icann) said it had received 884 requests for new suffixes from the US, out of a total of 1,930.

By contrast there have been 40 such applications from the UK, 303 from the Asia-Pacific region and 17 from Africa.

Details of who applied for what will be revealed in London later.

Ahead of the press conference, Icann also revealed that 166 of the claims were for what it termed "internationalised domain names" - generic top-level-domains (gTLDs) that are not in the Latin alphabet.

"That means that if you're a person living in China or in somewhere in India then you might have the opportunity to use the internet purely in your native script," Icann's president and chief executive, Rod Beckstrom, told the BBC.

"It's going to make the internet more approachable for people. Also we're seeing a trend on mobile devices to people liking short names and there will be opportunities for shorter names here, just because what was previously a second-level name now becomes first-level."

An example of this would be if the web address www.canon.com/products switched to www.products.canon.

Generic names
 
The Japanese camera maker is just one of several organisations to have confirmed it has paid the $185,000 (£118,800) fee to take part in the application process.

International breakdown

North America: 911 applications

Europe: 675 applications

Asia-Pacific: 303 applications

Latin American and the Caribbean: 24 applications

Africa: 17 applications

(116 in non-Latin alphabets)

The not-for-profit .uk domain name manager Nominet has also revealed it had applied to run .wales and .cymru while Google said it had applied for .google, .youtube and .lol.

Other less well-known bodies are also taking advantage of the move.

The firm Top Level Domain Holdings has spent more than $13.5m applying for 92 applications on itself and clients. These include claims for .hotel, .cricket, .london and .music.

Dubai-based Directi told the BBC it had also applied for 31 "mass market" gTLDs including .law, .bank and .baby.

Conflicting claims
 
Organisations face a minimum $25,000 annual renewal charge to keep their suffix, but not all applications will succeed.

"Community-based applications" - those from trade associations or other organisations representing recognised, sizeable groupings - will take precedence over "standard applications" - those from stand-alone businesses and others.

So for instance, if PepsiCo, Coca-Cola and the Grocery Manufacturers of America have all applied for .cola, the GMA should be given priority.

If two or more applicants of equal status have requested the same name a resolution process is triggered.

"We would notify them that they have been approved and who else has been approved and say they have 60 days to go figure out how they are going to resolve this," said Mr Beckstrom.

"If they don't resolve this in 60 days then we are going to put it up for auction where each of them can bid for the term. The proceeds of that auction will go to a new charitable or non-profitable entity."

The process has proved controversial. 87 companies and business associations sent a petition to the US Department of Commerce last year claiming "excessive cost and harm to brand owners" and the "likelihood of predatory cyber harm to consumers".

But it will take a while to find out if such fears prove true.

Because of the volume of requests Icann plans to divide and evaluate the applications in batches of about 500.

It says the first is expected to go live some time between April and June 2013.

Related Stories

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• Glitch delays net suffix deadline
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Warning DNSChanger victims, check for malware!

Facebook joins Google in warning DNSChanger victims

Warnings follow decision to withdraw safety net on 9 July

Federal authorities will not seek a further extension to a DNSChanger safety net, meaning an estimated 360,00 security laggards will be unable to use the internet normally unless they clean up their systems before a 9 July deadline.

DNSChanger changed the domain name system (DNS) settings of compromised machines to point surfers to rogue servers – which hijacked web searches and redirected victims to dodgy websites as part of a long-running click-fraud and scareware distribution racket. The FBI dismantled the botnet's command-and-control infrastructure back in November, as part of Operation GhostClick.

In place of the rogue servers, a bank of duplicate machines was set up to resolve internet look-up queries from compromised boxes. This system was established under a court order, which has already been extended twice. The move meant users of compromised machines could use the internet normally – but the safety net by itself did nothing to change the fact that infected machines needed to be cleaned.

At its peak as many four million computers were infected by DNSChanger. An estimated 360,000 machines are still infected and there's no sign that further extending the safety net will do any good, hence a decision to try other tactics while withdrawing the DNS safety net, which has served its purpose of granting businesses with infected machines time to clean up their act.

Last week Facebook joined Google and ISPs in notifying DNSChanger victims‎ that they were surfing the net using a compromised machine.

"The warnings are delivered using a 'DNS Firewall' technology called RPZ (for Response Policy Zones)," Paul Vixie, chairman and founder of Internet Systems Consortium, told El Reg. "This allows infected users (who are using the 'replacement' DNS servers) to hear different responses than uninfected users (who are using 'real' DNS servers). We can control how an infected user reaches certain websites by inserting rules into the RPZ," he added.

More information – along with clean-up advice – can be found on the DNS Changer Working Group website here. ®

 By John Leyden • Get more from this author

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PC users urged to check for malware

PETALING JAYA: Come July 10, thousands of computers infected with the DNSChanger malware (malicious software) will be disconnected from the Internet if their users don't take some necessary steps.

The problem is that many PC users may not even know that their computers have been infected.

F-Secure Labs Malaysia security adviser Goh Su Gim explained that the United State Federal Bureau of Investigation (FBI) planned to shut down hacker-controlled servers that had been reprogrammed to prevent infected PCs from being suddenly disconnected, causing support-call chaos.

Security issue: The F-Secure response lab in Kuala Lumpur. The cybersecurity company warns that thousands of infected PCs worldwide may be affected if the DNSChanger malware is not removed by July 10.

 

The servers were temporarily reprogrammed after the arrest of six Estonians believed to have created the malware in November last year.

The servers, located in Estonia and the United States, will be deactivated on July 9 and PCs still infected with DNSChanger will not function normally as they will not be able to access these servers.

For more story in The Star Tue 14, June 2012

Facebook comments, ads don't sway most users: poll

(Reuters) - Four out of five Facebook Inc users have never bought a product or service as a result of advertising or comments on the social network site, a Reuters/Ipsos poll shows, in the latest sign that much more needs to be done to turn its 900 million customer base into advertising dollars.

The online poll also found that 34 percent of Facebook users surveyed were spending less time on the website than six months ago, whereas only 20 percent were spending more.

The findings underscore investors' worries about Facebook's money-making abilities that have pushed the stock down 29 percent since its initial public offering last month, reducing its market value by $30 billion to roughly $74 billion.

About 44 percent of respondents said the botched market debut has made them less favorable toward Facebook, according to the survey conducted from May 31 to June 4. The poll included 1,032 Americans, 21 percent of whom had no Facebook account.

Facebook's 900 million users make it among the most popular online destinations, challenging entrenched Internet players such as Google Inc and Yahoo Inc. But not everyone is convinced that the company has figured out how to translate that popularity into a business that can justify its lofty valuation.

Shares of Facebook closed Monday's regular trading session down 3 percent at $26.90. Facebook did not have an immediate comment on the survey.

While the survey did not ask how other forms of advertising affected purchasing behavior, a February study by research firm eMarketer suggests that Facebook fared worse than email or direct-mail marketing in terms of influencing consumers' purchasing decisions.

"It shows that Facebook has work to do in terms of making its advertising more effective and more relevant to people," eMarketer analyst Debra Williamson said.

Those concerns were exacerbated last month when General Motors Co, the third largest advertiser in the United States, said it would stop paid-advertising on Facebook.

Measuring the effectiveness of advertising can be tricky, particularly for brand marketing in which the goal is to influence future purchases rather than generate immediate sales.

And the success of an ad campaign must be considered in relation to the product, said Steve Hasker, president of Global Media Products and Advertiser Solutions at Nielsen.

"If you are advertising Porsche motor cars and you can get 20 percent of people to make a purchase that's an astonishingly high conversion rate," said Hasker.

"If you are selling instant noodles, maybe it's not," he

WANING ENGAGEMENT

About two out of five people polled by Reuters and Ipsos Public Affairs said they used Facebook every day. Nearly half of the Facebook users polled spent about the same amount of time on the social network as six months ago.

The survey provides a look at the trends considered vital to Facebook's future at a time when the company has faced a harsh reception on Wall Street.

Facebook's $16 billion IPO, one the world's largest, made the U.S. company founded by Mark Zuckerberg the first to debut on markets with a capitalization of more than $100 billion.

It's coming out-party, which culminated years of breakneck growth for the social and business phenomenon, was marred by trading glitches on the Nasdaq exchange. A decision to call certain financial analysts ahead of the IPO and caution them about weakness in its business during the second quarter has triggered several lawsuits against Facebook and its underwriters.

Forty-six percent of survey respondents said the Facebook IPO had made them less favorable towards investing in the stock market in general.

While Facebook generated $3.7 billion in revenue last year, mostly from ads on its website, sales growth is slowing.

Consumers' increasing use of smartphones to access Facebook has been a drag on the company's revenue. It offers only limited advertising on the mobile version of its site, and analysts say the company has yet to figure out the ideal way to make money from mobile users.

Facebook competes for online ads with Google, the world's No. 1 Web search engine, which generated roughly $38 billion in revenue last year. Google's search ads, which appear alongside the company's search results, are considered among the most effective means of marketing.

The most frequent Facebook users are aged 18 to 34, according to the Reuters/Ipsos survey, with 60 percent of that group being daily users. Among people aged 55 years and above, 29 percent said they were daily users.

Of the 34 percent spending less time on the social network, their chief reason was that the site was "boring," "not relevant" or "not useful," while privacy concerns ranked third.

The survey has a "credibility interval" of plus or minus 3.5 percentage points.

By Alexei Oreskovic SAN FRANCISCO  Newscribe : get free news in real time 

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