The next twist in the Apple vs Samsung battle

US ITC rules that Apple infringed on Samsung patent rights.

 

The Samsung vs. Apple battle took another twist yesterday when the US International Trade Commission (ITC) ruled that Apple had infringed on Samsung patent rights.

This could mean a ban on the sale of certain Apple products in the US. Fortunately for Apple this ban would only relate to older models, most notably the iPhone 4 and the Ipad 2.

"We believe the ITC's final determination has confirmed Apple's history of free-riding on Samsung's technological innovations", a Samsung statement said.

Apple has already announced that they will appeal the ITC ruling. The ITC’s ban is also subject to review by the US President. The president can overturn it on public policy grounds, though this is considered unlikely. Apple can continue selling the devices during this review period which lasts up to 60 days.

The worldwide smart phone market is believed to be worth over $290bn. Although Apple dominated the market in 2012, Samsung outsold Apple by 2 to 1 in the first 3 months of 2013.  This shows that a shift may be occurring.

Samsung of course uses the Google Android system which is becoming more popular all the time. According to research firm Gartner, Android accounted for 66 per cent of global smart phone users in 2012, compared to 4 per cent in 2009, whilst Apple’s iOS operating system accounted for 19 per cent of the market in 2012, compared to 14 per cent in 2009.

Apple’s iOS system is of course only available from Apple products whereas Android is used by multiple brands including Samsung, Sony and HTC. Android can also be uploaded onto other devices including: laptops, netbooks, smartbooks, smart TVs, smart watches and cameras.

Notably, major tablet providers such as Google Nexus and Amazon also use Android. According to research form IDC, Apple accounted for 40 per cent of worldwide tablet sales in the first quarter of 2013, compared to 58 per cent in the first quarter of 2012. Android, on the other hand, had increased its market share from 39 per cent to 57 per cent over this same period.

Photograph: Getty Images

Andrew Amoils is a writer for WealthInsight

Photo: Getty Images
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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR