Apple vs Samsung: Who Owns the Rectangle?

This week in San Jose, a trial opened that may be the World War III of patents. Apple is suing Samsung, alleging that the Korean tech giant has knocked off many features of its iPhone and iPad. Apple wants $2.5 billion in damages – a record in a patent case -- and a court order forbidding Samsung from selling some of its most popular phones and tablets in the United States. Samsung claims that Apple is the one stealing, and that some of Apple’s patents are invalid because they are so commonplace.  

With respect to at least one of Apple’s patents, Samsung has a point. A patent at the heart of the dispute. Design Patent 504,889 — which lists Steve Jobs and Apple design guru Jonathan Ive, among others, as the “inventors” — is a claim for a rectangular electronic device with rounded corners. That’s right, Apple is claiming control over rectangles. The full claim is only 2 lines long, and amazingly broad – Apple is claiming all devices with the basic shape shown here.

Question of the Day: What Boomerangs in Value?

Our latest podcast, "Weird Recycling," is about the unlikely reuse of cast-off items. A reader named Gavin Castleton just happened to write in with an appealing riddle in the same vein:

Has there ever been a good/product whose value was reduced to zero, but somehow rose again? If so, could you shed any light on the market dynamics or social catalysts that revived it?

To put my question in context: I'm researching the music industry's rocky transition from goods to services (download/physical goods to streaming music subscription services). Journalists, industry folk, and consumers are all quite fond of declaring "Music will be free. It's obvious and inevitable." But I started to wonder if it really was all that inevitable. So I started looking for other examples of a product that lost its monetary value completely, but somehow returned from the dead.

It's No Major Major Major Major, But …

... this was still a puzzling sign to behold. It's on Lenox Ave. (a.k.a. Malcolm X Blvd.), in the southern end of Harlem:

Did your mind get stuck for a minute when it read those words, or did it quickly skip ahead and fill in a blank? (Danny Kahneman writes nicely about this phenomenon in Thinking, Fast and Slow.)

Once you walk a few steps further south, the sign becomes complete.

Steve Jobs's Final Product?

As a fan of both Walter Isaacson and of Apple products, I have happily begun reading (along with a few million others) the new Steve Jobs biography. So far I find it to be as compelling as expected. Just a few pages into it, I was struck by this thought: as much as Jobs is known for the iPod, iPhone, iPad, etc., I couldn't help but think that the book itself is in some ways Jobs's final product.

In the introduction, "How This Book Came To Be," Isaacson -- who, it should be clear, is a true heavyweight -- relates how Jobs approached and repeatedly pursued him to write the book. The terms were clear: Jobs would participate fully, and give others (including those who might be hostile to him) the go-ahead to do the same, and Jobs would have no right to approve or edit material. "He didn't seek any control over what I wrote, or even ask to read it in advance," Isaacson writes. That said, it becomes clear that Jobs was infinitely interested in shaping the book. To wit:

His only involvement came when my publisher was choosing the cover art. When he saw an early version of a proposed over treatment, he disliked it so much that he asked to have input in designing a new version. I was both amused and willing, so I readily assented.

Confessions of a Steve Jobs Fanboy

This is a cross-post from James Altucher‘s blog Altucher Confidential. His previous appearances on the Freakonomics blog can be found here.

I saw the news this morning when I looked at my iPad. Whenever I wake up, the first thing I do, before even going to the bathroom, is turn on the iPad and check the news. My heart sank when I saw the headline: Steve Jobs, dead at 56.

From my first Apple product (an Apple II+), to doing all my homework in college on the first Macintosh, to reading this news on my iPad, to typing this sentence on my Macbook Air, so much of my life has been influenced and changed by this man. Very sad day. My question for readers (please answer in the comments section) is: what was your first Apple product?

And now, here's an essay I've written about Jobs:

I was standing right next to Steve Jobs in 1989, and felt completely inadequate. The guy was incredibly wealthy, good-looking: a nerd super-rockstar who had just convinced my school to buy a bunch of NeXT computers, which were in fact the best machines to program on at the time. I wanted to be him, badly.

What if They'd Just Called it the iPhone 5?

Unless you're living under a rock, you're probably aware that Apple unveiled a new iPhone yesterday. At what turned out to be a relatively muted Apple product launch, it was new CEO Tim Cook's first chance at replacing Steve Jobs as product pitchman. It seems he did just fine.

The new iPhone is loaded with cool new features that the market was anticipating, with one exception: it's not called the iPhone 5, it's called the iPhone 4S.

By the time it became obvious that Cook wasn't going to introduce anything called an iPhone 5, (about 1:50 pm EST yesterday), the stock price began to plummet pretty quickly, as you can see in the chart below. From 12:15 pm to 3:15 pm, the price dropped more than 6%. Also, note the spike in volume at the bottom.

Was Steve Jobs' Retirement Already Priced into Apple Stock?

When news broke last evening that Steve Jobs was stepping down as Apple CEO, shares of the company fell by more than 5% in after hours trading. By the opening bell this morning, they'd recovered half of those losses. And during the first hour of trading, shares of Apple were only down between 1.1% and 1.6%.

Compare that to when Jobs announced that he was taking a leave of absence back in January of this year (his third leave since 2004), when shares fell by more than 8%. Within ten days, the stock had regained the lost ground, off news that Apple's revenue grew 70% in the fourth quarter. Back in January 2009, when Jobs left for health reasons, and ultimately a liver transplant, Apple shares dumped more than 10% in the immediate aftermath. Way back in the summer of 2004, when Jobs first announced that he'd had a cancerous tumor removed from his pancreas, the market's reaction was a slow sell-off, but nothing too drastic. Back then shares were trading at only around $16, so there wasn't nearly as much to chew off.

So, the market's now had seven years to get used to the idea of life without Jobs at Apple. And there still seems to be plenty of optimism about the future share price. Check out the odds from Irish bookmaker Paddy Power on where Apple's stock price will end 2011.

How Apple Sets Prices

An article in Bloomberg BusinessWeek breaks down Apple's pricing strategy and identifies its key components.

Can iPads Help Stop Sumo Corruption?

The Japan Sumo Association is handing out free iPads to training stables to encourage the use of email. The hope is that the devices will speed up communication between wrestlers, coaches and the association and create a "paper trail" for future scandal investigations.

What Does a Sick C.E.O. Do to His Company?

When Steve Jobs was diagnosed with pancreatic cancer in 2003, Apple waited until after his surgery to tell the public and shareholders — yet company stock only fell 2.4 percent on the next trading day. But Jobs’s gaunt appearance while speaking at the Worldwide Developers Conference in June and the speculation about his health that […]