For Samsung, Stealing, Cheating and Lying Are Business As Usual

Samsung-sign

The smartphone industry is dominated by two companies: Apple and Samsung. Absurdly, Canaccord Genuity recently reported that Apple and Samsung earn 109% of mobile industry profits.

(That impossible percentage results when the losses of competitors are factored in.)

Specifically, the research firm estimates that Apple earns 56% of industry profits and Samsung 53%. (Apple is actually further ahead of Samsung in profits than these numbers show, because some companies count tablet profits and others don’t.)

BlackBerry makes -4% of the profits (that’s negative four percent), Motorola -3%, and Nokia, LG and HTC each had -1%.

They’re weird numbers that don’t add up. But the point is that once again we learn that Apple and Samsung are making nearly all the money, some companies are making zero money and other companies are losing money.

But one of the dominant companies — Samsung — has a creepy approach to business, which is that they steal, cheat and lie apparently because the penalties of being unethical are far less than the rewards.

These are strong words, and will be generally received in the context of the old Apple fanboy/Android fanboy context in which those legions of users who form an emotional attachment to these companies and platforms will defend their side against the other no matter what. I can’t stop this argument from taking place and won’t even try.

However, to me, this isn’t part of that battle. Android is awesome, and most of the companies making Android handsets are blameless.

Samsung, on the other hand, has been proved beyond any doubt to be a stealing, cheating and lying organization, and I’ll review some of that proof below.

Samsung’s ethically-challenged approach to business is raising its ugly head yet again in the current damages retrial taking place in a Silicon Valley federal court.

Samsung Admits to Stealing

There’s an old Benny Hill bit that goes like this:

Benny Hill: “Hello darling. Would you fancy coming up to my room for 200 pounds?”

Girl: “Well hello, big spender. Sure. Sounds like a laugh.”

Benny Hill: “Rats, all I got on me is a fiver. Well that will have to do.”

Girl: “Hold on a minute, a fiver? What kind a girl do you take me for?”

Benny Hill: “We’ve already shown what type a girl you are, darling. Now we’re only haggling over the price.”

That’s essentially what happened in court this week when Samsung’s lawyer Bill Price said in his opening statement: “This is a case not where we’re disputing that the 13 [Samsung] phones contain some elements of Apple’s property.” What Samsung was there to dispute was the value of the property Samsung stole from Apple, and therefore the amount of the compensation to be paid to Apple.

To paraphrase Samsung’s attorney: “We’ve already shown what type a company Samsung is, your honor. Now we’re only haggling over the price.”

Apple says the price is $379 million and Samsung says they stole only $52 million from Apple in the form of intellectual property in the phones in question. (Whatever amount they arrive at will be added to the $560 million Samsung owes Apple for other thefts.)

That Samsung is a serial thief is not a point of controversy. It has been proved in court, and Samsung has not only admitted it, but put a dollar value on it.

Samsung has been proved to be a cheater and a liar, too.

Samsung was recently fined $340,000 by Taiwan’s Fair Trade Commission (FTC) for astro-turfing — hiring people to post fake comments supporting Samsung in online forums. Specifically, hired commenters were paid to trash Samsung’s competitors and praise Samsung’s products. In an industry where much of the marketing is done by passionate users, Samsung cheated by hiring fake passionate users.

The fine came in the wake of reports that Samsung was caught cheating on benchmark tests, then lying about it. In the most recent case, the Samsung Galaxy Note 2 looked for the presence of any benchmarking program and when it detected one, kicked into a special, high-power CPU mode in order to enable the phone to lie to benchmarking programs.

After this was proved beyond any doubt, Samsung lied about it and said they didn’t do it despite incontrovertible evidence to the contrary.

The company was also fined recently by Taiwan’s FTC for lying in ads about smartphone features.

This recurring pattern of stealing, cheating and lying by Samsung is creepy because they must know they’ll get caught and publicly called out. Yet they continue to do it.

It seems obvious that Samsung has made some kind of internal cost-benefit analysis about unethical business behavior, and concluded that it’s totally worth it.

For example, Samsung made a fortune on the phones containing Apple’s stolen ideas. And if they have to pay only the $52 million they’re saying they’re guilty of stealing — or the $379 million Apple says they stole — it was probably worth it.

The Samsung smartphone-buying public doesn’t care that Samsung is unethical and the rewards are higher than the penalties. So why not just reap the benefits of stealing, cheating and lying?

  • raist3001

    That’s essentially what happened in court this week when Samsung’s lawyer Bill Price said in his opening statement: “This is a case not where we’re disputing that the 13 [Samsung] phones contain some elements of Apple’s property.” What Samsung was there to dispute was the value of the property Samsung stole from Apple, and therefore the amount of the compensation to be paid to Apple.
    To paraphrase Samsung’s attorney: “We’ve already shown what type a company Samsung is, your honor. Now we’re only haggling over the price.”

    That’s because this is not a retrial. They have been found guilty weather or not Samsung agrees with the finding. Do you think this was their stand during the original proceedings? This Article is nothing more than a fanboys defense of a company guilty of its own lies, cheats, and stolen ideas. And the author knows this as he points this out in his own words. I love my apple products, but I thank god that I am not an apple fanboy.

  • woopwoop

    Hey man, how did you shave the back of your head to look like the Apple logo like that?, did you get help?.

  • lsd1969

    Samsung is a South Korean based company that will lie and cheat and steal for a profit. This has been proven in many different countries. They have no problems stealing ideas/patents from American companies. I will never buy another Samsung branded product again. Boycott Samsung!!!

  • Qwwq

    Such a shame! They have brought ethics to a point that buying Samsung phones will aid to stealing, cheating, and lying. For some people, respect matters more. And for that reason only, I proudly declare that I am NOT going to aid to their benefits any more.

  • aardman

    My, why you’d think Samsung is the sort of company that would have a convicted felon for its CEO! Oh, wait.

  • JoshMcCullough

    Yay Samsung! Love their products.

  • Jubei Kiwagami

    What is shocking to me is the huge influx of Samsun apologist flooding comments. From CNN, CNET, Yahoo pages. For example: Ridiculing Apple culture, disregarding any accomplishments as just copying others, arrogant for trying to protect IP that Apple has no right to claim as theirs, Made In China thus employing hundreds of thousands Chinese vs Americans ( probably the most ridiculous ) yet never accepting that Samsung employs 2500 Americans vs Apple employing 40 Thousand Americans, A7 Chip is Designed and Built by Samsung. It’s as if Apple got where they are today by Stealing Ideas.

  • monkeytower

    Hey Mike,

    “Galaxy Note 2 looked for the presence of any benchmarking program..”
    Actually it is the Galaxy Note __3__ done that (as also your link shows..).

    regards.

    .olaf

  • sanook

    Lying, Cheating and Stealing…….Think about it

    Are you asking the people stealing millions of movies vis FTP?
    People stealing music?
    People involved in frivolous lawsuits?
    People buying copy luxury brands?

    I think for the most part Americans simply don’t care, yeah they will might make some noise but in the end morals and scruples have pretty much vanished from mainstream society.

    As for Samsung, they ran the math long ago, its a whole lot cheaper to copy than to design and develop on your own. Btw, the A7 is designed by Apple, produced by Samsung. Samsung blatantly copied Sony in the TV business, Sony won the court battles but the dollars were small, so as long as that holds true copying will remain rampant.

    Sadly they don’t make anything unique anyone else might want to copy, would be nice to see it go the other way some day……..

  • omniphil

    Samsung also got caught trying to bribe a number of power bloggers to write product reviews in favor of theirs. They even got caught smuggling saccharine(artificial sweetener) into South Korea. I mean smuggling!! what kind of a world class company smuggles commodity into a country?? I believe In 2011, a former Samsung employee exposed in a testimony that there is a discrete division or department in Samsung Electronics operating specifically to copy Apple products. Apple and Samsung should not be compared in the same class. Samsung deserves that of much lower class if there is any left for them by now.

  • omniphil

    Hey Mike,

    “Galaxy Note 2 looked for the presence of any benchmarking program..”
    Actually it is the Galaxy Note __3__ done that (as also your link shows..).

    regards.

    .olaf

    They didn’t only cheat benchmark in just Galaxy Note 3, but also in Galaxy S4 as well.
    http://www.theinquirer.net/inquirer/news/2285907/samsung-caught-rigging-galaxy-s4-benchmark-scores

  • ankurpshah

    What about Steve job’s famous steal of graphical user interface from xerox?

  • Polyphonie

    What is shocking to me is the huge influx of Samsun apologist flooding comments. From CNN, CNET, Yahoo pages. For example: Ridiculing Apple culture, disregarding any accomplishments as just copying others, arrogant for trying to protect IP that Apple has no right to claim as theirs, Made In China thus employing hundreds of thousands Chinese vs Americans ( probably the most ridiculous ) yet never accepting that Samsung employs 2500 Americans vs Apple employing 40 Thousand Americans, A7 Chip is Designed and Built by Samsung. It’s as if Apple got where they are today by Stealing Ideas.

    If you’ve checked your facts beforehand, you would’ve found that Apple is one of the company who founded/started ARM Holdings in 1990. Every mobile SoC uses ARM architecture/processor. Everything from TI OMAP, Mediatek, Qualcomm’s Snapdragon S800, Samsung’s Exynos 5 Octa to Apple’s A7 series chips (and all their previous iterations).

    Also Samsung currently only holds the processor license- meaning Samsung would only use ARM’s own reference core design -the Cortex A7 or A15 in its line of Exynos chip.

    Prior to 2012, Apple did the same thing as Samsung (using ARM’s reference core design) but with the A6 and now the A7, Apple licenses the right to employ the instruction set (the ARMv7 in 2012 and now the 64 bit ARMv8) in any which way it wants and build its own core architecture: eg. Swift in the A6 and Cyclone in the A7. Qualcomm is doing the same with their current Krait core in Snapdragon.

    Apple simply use Samsung’s foundry in Texas to fabricate these chips.

    You should read Anandtech’s review of both the iPhone 5 and 5s to get better understanding. Or this article on ARM Business model:

    http://www.anandtech.com/show/7112/the-arm-diaries-part-1-how-arms-business-model-works

  • LTMP

    What about Steve job’s famous steal of graphical user interface from xerox?

    Apple didn’t steal it, they bought the rights to it. Xerox got shares in Apple plus cash, and Apple got the right to use the concept for computers.

  • markymac

    Add making cheap products (specifically phones and tablets) to the list. The entire Galaxy line of products (save for maybe the watch) are made from cheap, bendable, squishy plastic while still retaining the same $200 (with contract) price as phones/tablets made from incredibly higher quality materials.

    The iPhone, HTC One, Moto X and Nokia phones all sport much better build quality with attention to detail and design. But Samsung fans just eat it up and continue to support a company that should be selling their plastic crap for $100 less. I’d at least respect them going with cheap plastic if their devices were less expensive but they continue to swindle uninformed or just plain ignorant consumers.

    Shameful.

  • joetavormina

    Steve Jobs: good artists copy great artists steal

    http://www.youtube.com/watch?v=CW0DUg63lqU

    Steve Jobs saying that Apple has always been shameless about stealing great ideas.

  • norgan_

    Funny Apple enthusiast claiming someone is lying and cheating when Apple copy and steal other ideas to market as their own. Considering Samsung make a vast majority of Apples components it’s even more rich to claim this is theft. It’s not theft, it’s just the “file first” patent system working against who actually invented the technology in the first place.
    Apple are in no position to claim theft of ideas that’s for sure!

  • irishjim68

    Microsoft, Apple, Samsung, (add next big money company here)…

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Mike ElganMike Elgan writes about technology and culture for a wide variety of publications. Follow Mike on Google+, Facebook and Twitter.

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