Sorry, Apple: Samsung Is Winning The 4G War

In light of the much-publicised dispute over handset design patents between Apple and Samsung, many commentators have cast Samsung as the “fast-follower”, while Apple is pushing at the frontier of innovation. I would argue such commentators have things very wrong.

Samsung is winning the broader and more important war over patenting innovations, over the Fourth Generation (4G) technological standard or platform, which enables the use of today’s smartphones, including Apple’s widely applauded iPhone, and other manufacturers’ products.

Apple, on the other hand, has little control over the foundational technologies that will enable the delivery of future telecommunications services. This isn’t to take anything away from Apple’s enviable success in the international smartphone market but to explain, from a broader perspective, why Samsung has emerged as an innovation leader and how that has occurred.

Controlling tech platforms

The real winner of the patents war in the telecommunications sector will be the company that own patents related to the technological infrastructures on which all mobile devices are based. Why? Because any company that chooses to develop a product compatible with the underlying technological platform is required to make royalty payments to those firms who control the patents over that platform.

So the potential benefits of controlling the underlying technological infrastructure are enormous.

Samsung’s dominance in 4G patents

By the mid-2000s, three major international alliances had emerged to develop 4G standards, led by Nokia, which promoted Long-Term Evolution (LTE); Qualcomm, which promoted Ultra Mobile Broadband; and a somewhat unusual cooperative venture between Samsung and Intel, both of which focused on promoting a Korean-developed technology known as Mobile Wimax.

In recent years, Qualcomm has pulled out of the race to promote its own platform, focusing instead on promoting LTE – in part due to the perceived technological limitations of its technology relative to the advancements made by the Europeans and Koreans.

Today, Samsung owns the largest share of patents used in both the LTE and Mobile Wimax platforms while Apple holds very few patents over any of the network technologies.

According to one report published by the Wimax Forum, Samsung is estimated to own 15 to 20 per cent of Mobile Wimax-related patents. Meanwhile, in a separate report by iRunway, Samsung commands 9.36 per cent of all LTE patents.

Crucially, it seems a significant share of Samsung’s patent portfolio is related to the core technology that powers both 4G platforms, namely Orthogonal Frequency-Division Multiple Access (OFDMA), and is likely to be the foundation upon which future Fifth-Generation (5G) platforms will be based.

The Korean Intellectual Property Office reports that Samsung, as well as other Korean firms, holds the largest number of patents over OFDMA.

The closest competitor to Samsung in terms of its portfolio of patents is Qualcomm. In addition to being fierce competitors in patenting their respective innovations in telecommunications platform, it just so happens these two companies are some of the largest suppliers of chipsets supplied to Apple, HTC and other smartphone manufacturers.

Samsung’s impressive performance naturally begs the question of how a company that built its fortunes in the telecommunications sector based on a strategy of fast-followership – which entailed the payment of exorbitant royalty fees to Qualcomm, Nokia and others in the manufacture of 2G and 3G technologies – has undertaken such a dramatic shift into its present form?

Samsung’s transition

One could not explain Samsung’s transformation without at least mentioning its own entrepreneurship and its steady accumulation of in-house knowledge capacity – a story that could be repeated for many of Korea’s innovation champions such as Hyundai, and is probably beyond the scope of this article.

Instead, let me focus on the role of the Korean state. As Ha-Joon Chang discusses in the widely acclaimed 2007 book Bad Samaritans, Samsung began life in 1938 as an exporter of fruit and vegetables.

Things changed in the early 1960s with the coming to power of a President Park Chung-Hee, who sought to industrially transform the nation. With the full support of successive governments that bore many (but not all) the risks involved in entering new and ever increasingly knowledge-intensive industries, Samsung made its mark on the world in the manufacture of everything from ships to memory chips and telecommunications.

But since the early 2000s Samsung has made clear its ambitions to depart from a strategy based on fast-followership. Among other things, this involved the mass manufacture of handsets while paying handsome royalties to the innovation leaders from the United States and Europe, such as Qualcomm and Nokia respectively.

Samsung participated in the Korean Ministry of Information and Communication’s IT839 Strategy, a nationally coordinated project aimed at creating, commercialising and standardising internationally Korean-developed technological standards.

The company, as with thousands of other Korean firms, collaborated in the development of new technological growth areas. These included 4G technological standards such as Mobile Wimax, or Wibro as it is known in Korea.

While industry leaders may have initially harboured doubts about Korea’s ambitions, Mobile Wimax has been commercialised worldwide and is the main competitor to the LTE platform.

I don’t wish to imply governmental efforts to nurture new sources of techno-industrial growth will always result in “success”. But the Samsung story cannot be told without discussing the strategic role of the state in even an advanced economy such as Korea’s; a point discussed further by Professor Linda Weiss’s article on The Conversation.

The take-home message

Professor John Mathews, similarly to other astute observers, notes in his discussion of Korea’s current focus on promoting “green growth”: “Korea doesn’t do things by half”.

Samsung’s – and indeed, Korea’s – effective challenge and resulting dominance over the former innovation leaders from Europe and the United States demonstrates his point well.

Commentators on the current Apple vs Samsung debate should look beyond the surface of the dispute. Samsung is the innovation leader, not Apple – and not least due to the strategic vision and coordinating role of its home government.

This article was originally published at The Conversation. Read the original article.


Comments

    We all know Apple invented the idea of patenting technology innovations. This shameless copying from other companies must stop. Apple is well within their right to sue the pants off everyone in this article.

      Well, they started with suing the Beatles over the use of the Apple name - which of course the Beatles used first, long before Steve Jobs knew anything about computers. How dare he sue the most famous band in the world? He offended a lot of people back then, and continues to do so from the grave.

      How long will it before Apple decides to sue the Pope, or the Queen of England, or maybe even God? What about farmers who produce apples - are they safe? Or the people who eat apples, are we safe? Will Apple sue the world to get apples renamed? This insanity will only stop when people stop buying Apple's slave-labour made products, and when they realise that if everyone has an Apple product, it is no longer 'cool' - it is ordinary, dull, boring, nothing to write home about, just-another-gadget.

      It is time for a world-wide "no articles or blogs about Apple" day. Can we please have just one day where journalists and reporters don't write about Apple - where nobody mentions the name, not even once?

        Slave-labour made products?

        http://www.engadget.com/2012/09/03/samsung-finishes-initial-chinese-factory-audits/

          ..And Apple has also used 'slave labour' - remember those suicides and protests at their factories in China / Taiwan...

          Bottom line: you are twisting the facts.

            Actually, my response is related to the 'slave labour' comment by WillD. Didn't actually deny that Apple had issues at the Foxconn factory, though just like the Samsung story has a lot more details in it that actually makes these incidents less severe, but of course sells less newspapers. Anyway, it was a situation of 'pot calling the kettle black' that I was highlighting..

            So, not sure why you think there were facts that I was twisting?

        It was the other way round - Apple Corp (the Beatles) sued Apple Computer a number of times. Originally over trademark infringement, then subsequently over breaking the original litigation settlement terms ie Apple Computer stays out of anything related to music. Eventually settled, marked with the Beatles catalog finally appearing on iTunes. The end.

          Better than Apple's record MrT

          http://en.wikipedia.org/wiki/Foxconn_suicides

            And when Apple added sound to their computer, one of the error sounds was called sosumi (so sue me). In relation to the Beatles Lawsuit.

            Cool that you linked that wiki article, though the facilities are used by Apple, Dell, HP, Motorola, Nintendo, Sony and Nokia. Just curious as to why Apple should bare the brunt of it?

            By the way, suicide is a terrible thing and should not be taken lightly..

      successful troll is successful.

    Should I be surprised the author is Korean? They are fiercely patriotic.

      Yeah I was thinking that too, the article feels rather aggressive. A little disconcerting for a professor to be honest. His list of research points to more of the same it seems.

      http://sydney.edu.au/arts/government_international_relations/staff/academic_staff/sung-young_kim.shtml

        So it seems.

      ...but his points are nevertheless valid.

    Yeah but the difference is that Samsung's patents are almost certainly required to be licensed under FRAND conditions due to their use in standards whereas Apple's innovations largely cover design and UI elements . So while the author is correct that the Samsung patents are likely to be lucrative they will never be useful as an offensive/defences patent portfolio.

      People dont know the difference tbh. They still think that all patents are created equal.

    To say that number of patents = innovation is a bit of a stretch. Innovation measures more than the amount of "new" technology a company creates, but goes beyond that to include how people interact with technology. A cool idea that is patented but has no commercial application is less innovative than a cool idea that has not patented and is highly successful in the market. That, of course, is my point of view, applied with a little bit of commercial logic. Though of course it can be argued that commercial success does not equate to innovation either. But just by that argument, I think I have demonstrated the fact that innovation is actually not measurable.

    The other point that I would raise is that the article assumes that Samsung paid exorbitant royalty fees to the likes of Qualcomm and Nokia for 2G and 3G patents. What is the definition of exorbitant? The figure might be large, but if it make commercial sense, then the measure of "exorbitant" is completely diluted. If Samsung made money out of the "exorbitant" patents, then can we really call it "exorbitant"?

    The OFDM patents and the likes of all the 4G LTE patents that are owned by Samsung will eventually, if not already, placed under the FRAND licensing terms & conditions. FRAND basically means that royalties charged by Samsung, for the use of the 4G LTE technology, must be fair. By the sheer volume of phones that Apple makes, this final royalty fee will no doubt be measured as "exorbitant" by some, but no doubt, that companies like Apple (just like Samsung in the past) will make a call from a commercial sense, and decide if this exorbitant fee is worth paying for.

    I really appreciate this article, in that it demonstrates very clearly how Samsung moved from a fruit and vegetable exporter, to a manufacturer and now a company that owns technology patents. Showing how flexible and dynamic Samsung can be as a company, but fail to see why the author needs to compare an otherwise informative article to Apple, based on unmeasurable measures such an innovation.

    I guess it's just to draw in readers to read it :)

    Let's reassess in 12 months.

    Must admit this whole "Apple vs Samsung" saga made me curious about Samsung products,i have always been into Apple products,tried the Samsung Galaxy S3 and love it!!!!!!!!!!! Can see why Apple sueing....Samsung is surley a huge threat to their market share!!!!! Time will tell Apple!!!!!!

    samsung is the leading innovator for smart phones, not the apple.

    Apple, Samsung, Nokia....Who cares? Suing for breech of patent is PRECISELY why people patent in the 1st place. My idea, My Patent. I would trust contributors to this discussion would allow the law to take it's course, and if a patent has been broken, the villain should be punished. Imagine a free for all (let's not worry about patents) in the Medical Field...there would be no protection for investing in unique, patentable products, where the research costs can be covered through patent protection, giving them a right to get an ROI?...Same applies in this case. In fact, I'd say it'll drive Apple's competitors to come up with NEW ideas that will benefit us, the consumer. Go on.......pick this apart.

Join the discussion!

Trending Stories Right Now