5G Devices

Week in Review: Chinese advances even overshadow WWDC

Mobile’s new world order is clear as Huawei squeezes Samsing in handsets and Baili gives Apple a taste of its own design patent medicine


This week’s biggest headlines reflect how China is defining the mobile industry and putting pressure on smartphone vendors which once seemed untouchable.

Apple is threatened with a bar on iPhone 6 sales in China because of a patent lawsuit brought by a local handset maker, Baili. And Samsung acquired cloud infrastructure provider Joyent, forced to expand into new businesses as its smartphone engine slows, choked by market stagnation and competition from Huawei, Xiaomi and Lenovo.

The Beijing intellectual property authority has ruled that Apple violated the design patents of Baili and that the iPhone 6 and 6 Plus are too similar to Baili’s 100C model. The tables have certainly turned. A few years ago, Apple was seeking to neutralize Android rivals by citing controversial design patents – hence its ‘war of the rectangles’ with Samsung over the iPhone’s rounded corners. Now Baili is attempting something similar, and though the Apple is highly likely to avoid the threatened sales ban, the incident highlights how dominant mobile players are now going to have to find a way to work within China’s IPR frameworks, especially as Chinese vendors amass more patents of their own.

Huawei’s lawsuit against Samsung last week pointed to the same trend – Chinese companies are no longer imitators but trailblazers, and the IPR balance of power is shifting to Beijing.

In sales terms, too, the Chinese vendors are bucking the overall trend for smartphone sales slowdown and are reporting strong growth – particularly Huawei, which this week proclaimed that it had secured 8.5% of the smartphone market in the first quarter of 2016, and 2.6m sales of its P9 and P9 Plus models in their first six weeks on the shelves.

This puts Samsung on the back foot, making it more dependent on businesses which support rival OEMs – its displays, chips and memory – and driving it to develop new revenue streams urgently. It is focusing on mobile software and cloud services, but these are not its traditional strengths, so it will face a tough battle with more natural contenders. Its purchase of Joyent, a pioneer of containerization, will at least bring it a proven, readymade cloud platform to support the launch of its own services, and to bring in revenues from third party Joyent customers.

The other drama of this week took place in the US, where tough net neutrality rules were confirmed, delighting the disruptive internet players like Google, and dismaying mobile operators. The US Appeals Court in Washington DC said the FCC was right to reclassify broadband access services under the Title II rules which insist on open access to the internet and no priority for the operator’s own services or those of partners.

There are some special conditions for mobile operators, because of the capacity constraints of their spectrum, but far fewer than they believe to be necessary. AT&T and others are already threatening to take the issue to the Supreme Court, but a newly confident FCC may try to impose further regulations now, perhaps moving in on the practice of zero rating certain content and applications – which public interest campaigners see as a form of discrimination.

Amid all this ongoing disruption of the traditional mobile order, the announcements at Apple’s annual developer conference, WWDC, caused far less of a stir than usual. When the world is changing by the minute, the focus shifts away from the established leaders. The company did, however, make a host of announcements, many of them related to new services and user experiences enabled by Siri, artificial intelligence and machine learning. There were no devices, but all four operating systems – iOS, Mac OS, tvOS and the smartwatch platform – received numerous updates which will be implemented on new hardware in the fall.

The event had certainly moved away from the Steve Jobs era in its format – rather than streamlining the announcements around a few key messages, this was a scattergun approach with no dramatic headline to stand out from the blizzard of details.

But that is another sign of the maturing of this market. Smartphones are no longer the exciting game in town – new devices, services and players are grabbing the attention. As yet, Apple does not have a compelling offering to take it beyond the iPhone. When it does, WWDC will be cool again – as long as its Chinese rivals haven’t got there first.

VPS hosting