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Verdict Shows Samsung Needs to Copy Apple Design Culture: Tech

Following last month’s verdict saying Samsung Electronics Co. (005930) infringed Apple Inc. (AAPL) mobile-phone patents, the Korean electronics company faces pressure to copy another attribute of the iPhone maker: its focus on design.

The California jury ruling reinforced Samsung’s image as a follower rather than a trendsetter. The prospect of a ban on eight phones in the U.S. and a damages bill of more than $3 billion ratchets up pressure on Samsung to overhaul how it crafts handsets and give its design team freer rein to take risks. Yet creating the conditions for such a fundamental culture shift won’t be easy and any payoff uncertain in an industry whose creative standard was set by the late Steve Jobs.

“They need to change their innovation model,” said Sohrab Vossoughi, founder of Ziba, a design firm in Portland, Oregon, that counts Samsung among its clients. “Change of cultural mindset is going to be the biggest barrier.”

Samsung’s initial challenge will be making its new generation of handsets look as different as possible from Apple iPhones. Future devices will probably boast more styluses, have control buttons in different places and come in shapes besides rectangles with rounded corners, said Alexander Poltorak, chief executive officer of General Patent Corp.

“They have to move away from Apple design,” said Poltorak, whose firm represents clients in intellectual property enforcement. “Their products look like knockoffs. The judge indicated the changes have to be substantial.”

Future Products

Samsung has already offered a glimpse of coming handsets in its Galaxy S III, which is wider and taller than Apple’s iPhone, and is the company’s top-selling handheld, according to Sanford C. Bernstein & Co. While the device isn’t on the proposed ban list related to the Aug. 24 verdict, Apple last week added it to a roster of products that it says infringe Apple patents.

At the IFA consumer-electronics fair in Berlin last week, Samsung also touted new phones using Google Inc. (GOOG)’s Android and software made by Microsoft Corp. (MSFT) These include the latest version of the pen-equipped Galaxy Note smartphone, with a 5.5- inch screen, larger than its predecessor.

Samsung devices may include different navigational commands, such as how users scroll down the screen or zoom in on a picture or text, Poltorak said.

The Suwon, South Korea-based electronics maker will probably step up plans to introduce so-called flexible displays, or device screens that can be bent, twisted or folded, said Seo Won Seok, an analyst at Korea Investment & Securities Co.

Weaving these types of screens into phones would help Samsung take advantage of its expertise as one of the largest makers of high-definition screens, Seo said.

Ban, Damages

“They may push flexible displays out earlier than expected because we can do a lot of different things with them” said Seo, who is based in Seoul.

After winning more than $1 billion amid the patent infringement verdict, Cupertino, California-based Apple is seeking a ban on eight models of Samsung smartphones, including several from the best-selling Galaxy lineup, and the extension of a preliminary injunction on Samsung’s Galaxy Tab 10.1 tablet. Judge Lucy Koh has discretion to triple the damages.

One of Samsung’s hurdles will be changing its culture, which has emphasized speed, efficiency and using other company’s products as inspiration, Seok said.

The company spends heavily on research and development, and it has produced breakthroughs in semiconductor, screen and computer-memory technology. Still, even with 20 times as many designers as Apple, the company tosses out too many promising ideas, said Ziba’s Vossoughi.

Kitchen Designers

Apple, by contrast, has a team of about 15 designers, led by Senior Vice President of Industrial Design Jony Ive, who often brainstorm ideas around a kitchen table in the lab at the company’s headquarters.

The result is a distinctive, minimalist design for a small family of products that have helped transform Apple from a technology-industry also-ran into the world’s most valuable company.

Samsung was unchanged at 1,218,000 won in Seoul trading today, giving it a value of $158 billion. Apple, with a market capitalization of $624 billion, rose 0.2 percent to $665.24 in New York trading Aug. 31.

While rival manufacturers have tried to emulate many elements of those devices, they haven’t copied the structure that lets Apple build the products in the first place, said Ross Lovegrove, an industrial designer.

BMW’s Bangle

“All these other companies don’t see that they need to put the right pilot in with the right support and they would do really great things,” said Lovegrove, who worked on Sony Corp. (6758)’s Walkman and computers for Apple.

Apple’s “pilot” in this respect was, of course, co- Founder Jobs, whose obsession with detail fueled the creation of a generation of iconic electronics known for elegant design and ease of use.

Samsung, which disputes allegations that it copies Apple, has retained Chris Bangle, former head designer at Bayerische Motoren Werke AG, to help bring more pizazz to its products.

“Samsung will continue to bring new and meaningful innovations to improve the value of our lives based on our design philosophy as we have in the past, regardless of the lawsuits,” the company said in an e-mailed statement.

Decisions in patent suits don’t always go Apple’s way, either. The company lost a patent lawsuit in Japan last week as a Tokyo judge ruled that Samsung smartphones and a tablet didn’t infringe on an Apple invention for synchronizing music and video data with servers.

Still, unless it makes broad design changes to smartphones and tablet computers, Samsung risks an endless tie-up in court with Apple, which has been granted a wide variety of patents that go beyond those covered by the California verdict.

Giving more power to creative designers will be Samsung’s fastest way to change course, said Christopher Carani, a partner at the Chicago-based intellectual property law firm McAndrews, Held & Malloy Ltd.

“Samsung and other Apple competitors have top-tier talent in terms of industrial design,” he said. “Now they have to go outside the box.”

To contact the reporters on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net; Olga Kharif in Portland at okharif@bloomberg.net; Jun Yang in Seoul at jyang180@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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