beyondbrics

If you can’t beat them, copy them – or even block them. That seems to be the message to the world’s biggest tech company, Apple, from South Korea and China.

While trying to shore up its store designs in China to stop the proliferation of fake stores, Apple (AAPL:NSQ) is also subject to a blocking move by South Korea’s Samsung over sales of the iPhone 5 in several countries.

The Samsung battle has several dimensions. Apple and Samsung are rivals. But Samsung makes some of the most important components of the iPhone, including the memory chip. According to analyst iSuppli Samsung parts account for 26 per cent of the cost of iPhone components. So anything that hurts the iPhone eventually hurts Samsung too.

Despite that close relationship, the two companies are getting used to seeing each other in court. Apple sued Samsung earlier this year over the design of the Galaxy S handset and the Galaxy Tab tablet, arguing that they copied Apple products. Samsung then countersued, and so the battle goes on.

Earlier this month, a German court banned the sale of Samsung’s newest Galaxy Tab tablet computer in Europe as it upheld the complaint by Apple that Samsung lifted the design from the iPad. In all, according to one blogger, FOSS Patents: “Apple and Samsung are now litigating against each other in (at least) eleven courts in nine countries on four continents”.

Ian Robertson, analyst at Seymour Pierce, told beyondbrics that the relationship between the two companies had analysts “scratching their heads”.

“This is a car crash waiting to happen. Samsung is one of the leading non-Apple phonemakers, and they must have taken a view on what customers will buy if the iPhone is blocked – they are one of the leading alternatives. Both companies want to rule the world, but by different means.”

Apple had no further comment on the ongoing legal procedings from their original filing from April (pdf), and Samsung also had no comment due to legal reasons.

While Apple’s impact on desktop computing, portable music players and mobile phones is widely recognised, its influence on retail sometimes goes less noticed. Technology retailers used to stack the shelves full of devices like a supermarket, but Apple pioneered a minimalist look and increased the customers’ ability to play with its products. As media and technology commentator Jeff Jarvis put it:

What is [Steve] Jobs’s true genius? Retail. As high streets start to look haunted, Apple stores sell at record rates. They do it not by cramming in boxes but by hiding them. They let us hang out and play in a Wi-Fi clubhouse.

But the success of this style has prompted many imitators, especially in China.

The gaps in Apple’s intellectual property rights protection were highlighted by news in July of a fake Apple store in Kunming, the capital of the south-western Chinese province of Yunnan.

With a growing tech-savvy middle class in China, the last thing Apple needs is imitators stealing customers through copycat stores, let alone the widespread fake iPhone 5s in the country.

All of which adds up to a bit of bother in emerging markets for Apple. The company has just been awarded 40 patents in China, according to Reuters, but if the Samsung experience is anything to go by, court battles will follow wherever the company goes.

Apple has been a target for copycat products in China and elsewhere for some time now, but the company has limited options to deal with the problem. “You can keep suing, or try to roll out products faster,” said Robertson, but patents have a limited impact and can be hard to enforce. “If you are producing a fake, you copy and be damned, and then see if Apple can find you.”

Related reading:
Vietnam: Chinese “iPhones” for sale, beyondbrics
Apple secures patents on China stores, FT
What Steve Jobs can learn from fake Apple stores, beyondbrics
China in thrall to the cult of Apple, FT
Samsung to seek iPhone 5 sales ban, FT