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Behind Apple's record sales are signs of desperation

Hailstorm of lawsuits hints at vulnerability

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"What's of concern is that you can see the strategic relationship between Samsung and Apple getting worse of late," Kim Young Chan, an analyst at Shinhan Investment in Korea told Bloomberg. "As Samsung pushes ahead with its handset and tablet business, Apple is trying to keep Samsung in check."

Steve Dowling, a spokesman for Apple, commented: "It's no coincidence that Samsung's latest products look a lot like the iPhone and iPad, from the shape of the hardware to the user interface and even the packaging. This kind of blatant copying is wrong, and we need to protect Apple's intellectual property when companies steal our ideas.

"Samsung will respond actively to this legal action taken against us through appropriate legal measures to protect our intellectual property," was the official statement from the Korean firm, but the country's Yonhap news agency quoted executives saying that, in fact, it was Apple which violated Samsung IPR. One commented: "Apple is one of our key buyers of semiconductors and display panels. However, we have no choice but respond strongly this time."

In fact, Apple was Samsung's second largest customer in 2010, accounting for 4 per cent of its total revenue of $142bn. Apple may have been trying to reduce its dependence on the firm, for instance by reducing Samsung's design and manufacturing input to its A4/A5 processors, but it will not be able to avoid it, given the shortages of touchscreens and memory chips and the problems already seen in tablet parts.

Apple suffers reverse in ITC

The courts may take years to decide on the merits of the case, and how far a rectangular shape really can be patented, but the rising tide of lawsuits in smartphones shows the level of competition, and Apple's sense that its day in the sun is over. Filing suit over elements like shape and color smacks of desperation, as do some of the patents cited in Apple's separate battles with HTC, Motorola and Nokia. A key decision went against Apple in the US International Trade Commission this week, with a judge ruling for HTC and Nokia. The vendors are accusing the iPhone maker of "dredging up" ageing patents in its determination to stop rivals in their tracks.

A lawyer at the ITC has said that Nokia and HTC did not infringe Apple patents, a recommendation which is highly likely to be adopted by the full body when it reaches its final verdict in early August. Apple has been seeking to block imports of both Nokia and HTC smartphones to the US, as part of broader legal battles with the Finnish giant, and a wider attack on the Android community – also involving Motorola and now Samsung. This case is only one of several against Nokia. Last month, the ITC ruled against Apple in a separate complaint against Nokia.

The HTC ruling is particularly important because it is likely to have implications for the whole Android base. Apple claims the Taiwanese vendor infringes five patents that are vital for "seamless integration of hardware and software". Some, related to signal processing and interprocess communications, date from the early 1990s and "were, at best, a very narrow distinction" from the inventions of others, HTC lawyer Robert Van Nest told ITC judge. "HTC is a smartphone innovator and pioneer in the smartphone sphere. They were there long before Apple," he said. "The fundamental differences from the Apple patents represent choices made by HTC and Google."

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