Apple Inc. v. Samsung Electronics Co. Ltd. et al

Filing 1022

Administrative Motion to File Under Seal Documents Re Apples Opposition To Samsungs Motion For Summary Judgment filed by Apple Inc.. (Attachments: #1 Proposed Order, #2 Declaration Of Peter W. Bressler In Support Of Apples Opposition To Samsungs Motion For Summary Judgment, #3 Exhibit 1, #4 Exhibit 2, #5 Exhibit 3, #6 Exhibit 4, #7 Exhibit 5, #8 Exhibit 6, #9 Exhibit 7, #10 Exhibit 8, #11 Exhibit 9, #12 Exhibit 10, #13 Exhibit 11, #14 Exhibit 12, #15 Exhibit 13, #16 Exhibit 14, #17 Exhibit 15, #18 Exhibit 16, #19 Exhibit 17, #20 Exhibit 18, #21 Exhibit 19, #22 Exhibit 20, #23 Exhibit 23, #24 Exhibit 24, #25 Exhibit 59, #26 Exhibit 60, #27 Exhibit 61, #28 Exhibit 62, #29 Exhibit 63, #30 Exhibit 64 (Part 1 of 2), #31 Exhibit 64 (Part 2 of 2), #32 Exhibit 65, #33 Exhibit 66, #34 Exhibit 83, #35 Exhibit 84, #36 Exhibit 85, #37 Exhibit 86, #38 Exhibit 87, #39 Exhibit 88, #40 Exhibit 89, #41 Exhibit 90, #42 Exhibit 91, #43 Exhibit 92, #44 Exhibit 93)(Jacobs, Michael) (Filed on 6/1/2012)

Bressler Decl. In Support of
Apple’s Opp. to Samsung’s
Mot. For Summary
Judgment
Ex. 19

Apple should pull the plug on the iPhone - MarketWatch

Page 1 of 2

John Dvorak's Second Opinion

March 28, 2007, 7:18 p.m. EDT

Apple should pull the plug on the iPhone
Commentary: Company risks its reputation in competitive business
By John C. Dvorak

BERKELEY (MarketWatch) -- The hype over the unreleased iPhone has actually increased over the past
month despite the fact that nobody has seen or used the device. This, if nothing else, proves the power of
branding and especially the power of brand loyalty.
It's the loyalists who keep promoting this device as if it is going to be anything other than another phone in a crowded
market. And it's exactly the crowded-market aspect of this that analysts seem to be ignoring.
Apple Inc.'s (NASDAQ:AAPL) past successes have been in markets that were emerging or moribund. Its biggest hit
has been the iPod. But let's examine what happened here.
First the MP3 player business was segmented and unfocused with numerous players making a lot of cheap junk and
not doing much to market any of it.
Apple does what? Advertise. Gosh, what a concept.
Then there was the online music distribution business, again unfocused and out-of-control with little marketing and a lot
of incompatible technologies. So Apple comes in with a reasonable solution, links it to the heavily promoted iPod and
bingo. A winner.
It advertises on TV, on billboards and on the Internet. Within no time the company takes over the business that would
probably still be languishing without Apple.
Thus Apple does what it does best. It produces a jazzy product and promotes it like any good business should do. And
in the process manages to get a high margin.
This is nothing more than the fundamentals.
AAPL 618.63, +19.08, +3.18%
AAPL

Now compare that effort and overlay the mobile handset business. This is not an
emerging business. In fact it's gone so far that it's in the process of consolidation with
probably two players dominating everything, Nokia Corp. (NYSE:NOK) and Motorola
Inc. (NYSE:MSI)

During this phase of a market margins are incredibly thin so that the small fry cannot compete without losing a lot of
money.
As for advertising and expensive marketing this is nothing like Apple has ever stepped into. It's a buzz saw waiting to
chop up newbies

http://www.marketwatch.com/Story/story/print?guid=3289E5E2-E67C-4395-8A8E-B94C1...

4/2/2012

Apple should pull the plug on the iPhone - MarketWatch

Page 2 of 2

The problem here is that while Apple can play the fashion game as well as any company, there is no evidence that it
can play it fast enough. These phones go in and out of style so fast that unless Apple has half a dozen variants in the
pipeline, its phone, even if immediately successful, will be passé within 3 months.
There is no likelihood that Apple can be successful in a business this competitive. Even in the business where it is a
clear pioneer, the personal computer, it had to compete with Microsoft and can only sustain a 5% market share.
And its survival in the computer business relies on good margins. Those margins cannot exist in the mobile handset
business for more than 15 minutes.
And note that the Microsoft Corp. (NASDAQ:MSFT) versus Apple battles are laughable compared to the frenzied
marketing mania in the handset business. Even Microsoft itself has troubles with its attempts to get into a small sub
segment of the handset business with its operating system.
What Apple risks here is its reputation as a hot company that can do no wrong. If it's smart it will call the iPhone a
"reference design" and pass it to some suckers to build with someone else's marketing budget. Then it can wash its
hands of any marketplace failures.
It should do that immediately before it's too late. Samsung Electronics Ltd. (OTN:SSNGY) might be a candidate.
Otherwise I'd advise you to cover your eyes. You're not going to like what you'll see.

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4/2/2012