Why Apple Is ‘Losing’ the Samsung Lawsuit So Far

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Apple is a riddle, wrapped in a mystery, inside an enigma. No, wait. That was Stalinist Russia.

Whatever. The two are nearly identical in their abilities to keep secrets.

As an Apple observer myself, I’m keenly aware of the iron curtain of secrecy that prevents anyone from knowing what Apple is working on, what they’re planning and what their processes are for developing new technologies.

Rumors and speculation are always so easy to come by; unannounced facts are rare — even facts about the past.

That’s one of the great things about Walter Isaacson’s biography of Steve Jobs. It gave rare insight into the inner workings of Apple, to some degree.

And that’s what’s so great about the current jury trial in Silicon Valley, where Apple is suing Samsung and Samsung is suing Apple. It’s forcing Apple to reveal countless facts and events that it doesn’t want to reveal.

The lawsuit appears to be far from over. But already, it’s clear that Samsung is “winning.” Why? Because it’s a contest between a company that cares deeply about its secrets — even small ones — and a company that doesn’t care as much. So the discovery and revelation is punishing Apple.

Here are the 8 secrets Apple has been forced to reveal in court in the past couple of weeks. 

1. Steve Jobs changed his mind about a 7-inch iPad

Steve Jobs famously dissed the 7-inch form-factor in an October 2010 Apple earnings conference call by saying: “This size isn’t sufficient to create great tablet apps in our opinion.” He also said that because tablet users tend also to have smartphones, “giving up precious display area to fit a tablet in their pockets is clearly the wrong trade-off.” 7-inch tablets are “too big to compete with a smartphone and too small to compete with an iPad.”

But three months later, we learned in the trial, it appears that Jobs changed his mind.

Apple Vice President Eddy Cue said in a January 2011 email revealed in court that (after playing with a Samsung tablet) he strongly advocated to Jobs that Apple should sell a 7-inch iPad, and he championed the idea to Jobs several times starting in late November of 2010. Jobs became “receptive” to the idea “the last time,” according to the email.

2. Apple spent more than a billion dollars marketing iPhone and iPad

Apple’s Senior VP of Marketing Phil Schiller was forced to specify in court that Apple spent $647 million on marketing for the iPhone before the end of fiscal 2011, and $457.2 million to market the iPad. That’s more than $1.1 billion in iMarketing money.

3. Apple closely watches the competition

Part of the Apple mythology, which is encouraged by Apple itself, is that Apple doesn’t pay attention to the competition.

Samsung produced an internal Apple email written by Apple industrial designer Christopher Stringer, in which he wrote: “Paul, I need your latest summary of our enemies for an ID brainstorm on Friday… If you have any more data beyond this please could you update the chart? I wonder if there’s anything worth noting about the HP/Palm leak.”

4. Apple listens to its customers

Another part of the Apple mythology is that Apple doesn’t get product cues from customers and users. Apple says they design products for themselves because the users don’t really know what they want.

However, the trial has revealed the existence of extensive surveying of customers by Apple. Samsung wants the data made public.

Survey questions reportedly aim to find out why Apple customers choose iPhone instead of competing phones, for example, and specifically how much they like or dislike specific features of the iPhone.

Apple strongly opposes the revelation of the survey data. The judge sided with Samsung but granted Apple time to appeal.

5. Most people buy iPhone cases

Internal Apple documents forced out of Apple in the trial show that 78 percent of iPhone owners buy cases for their iPhones.

6. Apple thought about adding a “kickstand” to the iPad

Apple created several iPad prototypes that in hindsight look somewhat wacky and loony. One had a huge “kickstand” in the back, so the tablet could be propped up like a framed photo.

7. The code-name for the iPhone was “Purple” 

The initiative to develop a phone was known internally at Apple starting in 2004 as the “Purple Project,” and the area where this development took place was called the “Purple Dorm,” which smelled like pizza, according to Apple VP Scott Forstall. Bonus detail: The “Purple Dorm” had a “Fight Club” sign to emphasize secrecy, as in: The first rule of fight club is that you do not talk about fight club.

8. Apple made a phone instead of a camera or a car

Schiller also revealed that the iPhone came about because Apple was interested in expanding into other markets. The company actually entertained the ideas of making “a camera or a car,” according to Schiller.

Why Secrecy Matters to Apple

A big part of Apple’s aura is the perception of effortless genius. A dozen brilliant designers sit around a kitchen table and dream up the future.

But the Samsung trial has forced Apple to reveal a different reality. Apple works really hard to get its success. Apple spends a fortune to market its products. Apple people speak internally in the language of violence: It’s competitors are “enemies” that must be defeated in a design “fight club.” It pays close attention to the competitive products and customer satisfaction. Apple doesn’t always know what it’s doing.

And it’s not just aura. Apple people probably believe that it’s their view of the world — how they think about problems and solutions — that sets them apart. And revelations about how they thought about past products enables competitors to more easily get inside their heads and perhaps think the same way about future products.

Whether you agree with Apple’s obsession with secrecy or not, that obsession exists. Keeping these secrets is important to Apple. Which is why the lawsuit has thus far cost Apple far more than Samsung.