In a historic ruling on August 24, a U.S. District Court jury awarded Apple (NASDAQ:AAPL) over $1.05 billion in damages after finding Samsung (PINK:SSNLF) guilty of infringing on six of Apple’s “design” patents.  We say “historic” not because of the high dollar amount, which in itself is not particularly significant to either company considering their huge sizes individually, but because of the ramifications it has on the future course of the smartphone industry. With Apple making good on Steve Jobs’ claims of declaring a thermonuclear war on Google’s (NASDAQ:GOOG) Android, existing hardware partners may start supporting the ecosystems of rivals such as Microsoft (NASDAQ:MSFT) and Research In Motion (NASDAQ:RIMM) in order to diversify away from Android.
Android looks vulnerable
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The ruling has given Apple enough cannon fodder to launch an all-out assault on not only Android’s most important partner, Samsung, but also other handset partners such as Motorola and HTC. Apple has already filed an injunction to temporarily ban the sales of some patent-infringing Samsung devices in the U.S. If Apple succeeds in doing so, Samsung may see only a limited near-term impact considering that these devices are fairly old now and are nearing their end-of-the-product-cycle. But, it could set a dangerous precedent for a similar case that is scheduled for next year which concerns some of Samsung’s newer models such as the highly successful Galaxy S III.
A successful ban on Samsung’s products on U.S. soil could lead to Apple pushing for similar rulings in other geographies as well. With Samsung gaining handsome smartphone market share and gradually growing its presence in the higher end of the market as well, this ruling couldn’t have come at a better time for Apple. (see Apple Falls Behind Samsung In Smartphone Sales But iPhone 5 Is Near)
And the timing couldn’t have been worse for Android. Microsoft is planning a big launch of its Windows 8 platform, with the simultaneous release of multiple PCs, tablets and smartphones by partners this year, including the much anticipated Nokia’s Lumia WP8 phone. Even RIM is planning to launch its BB10 OS soon after in Q1 2013. While RIM has so far used the BlackBerry OS for its own phones alone, it is considering licensing the OS out to other hardware partners as well in order to drive the ecosystem development. With Apple going after Android and Google possibly planning to launch its own phones through the Motorola acquisition, Samsung and other Android partners may be pushed into diversifying by increasing their focus on rival platforms.
Nokia’s WP8 plans boosted
While Microsoft does stand to benefit in a huge way if this happens, considering that it looks like it finally has a chance in the mobile device market with the new revamped WP8 OS, Nokia’s bet on Microsoft also gets a boost. The Lumia smartphones may have found favor with many technology enthusiasts but the well-entrenched ecosystems of Apple and Google have left little room to grow for Nokia. Carrier partnerships have not been hard to come by (Nokia has already signed on AT&T and T-Mobile in the U.S., China Telecom in China and is looking to add Verizon soon), but getting people to warm up to the Windows ecosystem has proved tougher with little support from other handset makers.
The iTunes store and Google Play boast of more than 650k and 600k apps, respectively, while there are only 100K available in the Windows Phone Marketplace. More support from partners such as Samsung and HTC, driven by the Apple verdict, could see Windows Phones reach more customers and fuel developers’ interest in the platform. Also, since Windows Phone 8 draws hugely from Windows 8, the two platforms are closely integrated, thereby making apps developed for either platform easier to port and increasing the user base for app developers. Having a huge user base for the Windows PC platform will also help Microsoft generate significant support for the new integrated Windows8/WP8 user experience, driving the sales of Windows Phones in general and the Lumia in particular.Notes: