From the look of it, life couldn’t be better right now for Apple Inc. The value of the Cupertino, California-based technology giant surpassed $600 billion in mid-August to become the world’s most valuable company. Last Friday Apple scored a major legal victory over its smart device market rival Samsung, with a California court finding several Samsung devices infringed on Apple patents. Apple was awarded $1.05 billion in damages.

While $1.05 billion is a big number, it is trivial compared to the huge blow the verdict dealt to Samsung and possibly many other brands of smart devices running on Google’s Android operating system.

Some experts predicted that the makers of Android devices would have to drastically change the direction of designing their products to circumvent the Apple patent infringement. Others said the ruling would create an “Apple tax” ― fees others have to pay to use Apple patent technologies and features ― that will in turn increase the prices of these devices. For Apple, that means either hindering the advancement of Android devices or their loss of some competitiveness in price.

Apple is expected to cap its good news run next month with the launch of the much-anticipated iPhone 5 and perhaps a 7-inch iPad.

Apple enthusiasts and market watchers have been reading the constant purported leaks and rumors about the new iPhone like fortunetellers looking for signs from heaven. The hype is obviously there and no one doubts the impact the announcement of a new Apple smartphone might have.

All these apparent strengths, however, obscure the potential challenges the fabled company is facing. The fact that a patent lawsuit victory becomes major good news for Apple shows how much the company has changed from a market creator into a defensive market leader jealously guarding its tuff.

Apple’s real strength under late leader Steve Jobs was to create not only new products but brand new markets. The Apple II was the first personal computer with commercial value; the portable music player iPod and the online music market iTunes Store virtually launched the digital music market; the iPhone jump-started the smartphone industry; the iPad created the tablet device market; even the seemingly traditional MacBook Air heralded the Utlrabook subcategory of high-priced, ultrathin, lightweight laptops with powerful but expensive SDD hard disks and no DVD ROM.

Apple’s last major breakthrough, the iPad, is already two years old. In these two years the company has launched other seemingly promising new services and gimmicks such as the social-network feature, Ping, for iTunes, the cloud-based information sharing service iCloud, the video-calling service Facetime, and the voice-recognition personnel assistant Siri. None of them succeed in really catching on or distinguishing themselves from their competitors. The iPhone 4 and iPhone 4S are hugely successful financially but they are just upgrades in the iPhone line with less market-shaking innovations.

The introduction of the iPhone 5, Apple’s first major new product launch after the death of the revered Jobs, will be a major case in point to interpret the outlook of the company. If the new smartphone model offers only more juice, better hardware and exterior updates, then the company may find their competitors closing in faster.

If Apple is launching a smaller 7-inch iPad as rumored, it will mark the first major step the company has made to catch up with competitors, and its obvious shift from forward-looking innovator to careful market strategist. In other words, Apple will become more like its competitors and less like Apple.

The Friday verdict may be a major legal victory for Apple, but if the company cannot exhibit its trademark groundbreaking innovation, the verdict could mark the watershed where competitors began to catch up with Apple in terms of innovation. Some makers from the Android camp are already churning out devices with sleek features such as smartphone with image projection hardware, and Internet TV with voice and hand-gesture control.

The technology giant should watch out and not be slowed down by its own popular products. It should remember that its real strength is in creating a new way of life for the future generation, not just making big-sellers.

(The China Post (Taiwan))
(Asia News Network)