Apple Slammed By Judges, Stock Slides 20%, Consumers Choose Samsung

Written by David Richards     11/11/2012 | 05:01 | Category: COMMENT

COMMENT: As Apple Australia continues its fight with Samsung Electronics in the Federal Court, a Judge in the UK has slammed Apple for publishing 'false and misleading' material. He has even suggested that senior Apple executives showed a 'lack of integrity' by saying staff would need two weeks to make 'minor changes' to the company website.

The arrogance oozing out of Apple across all aspects of their business is now starting to hurt them with analysts questioning whether the Company has peaked. Arch enemy Samsung, who was once a key manufacturing partner of Apple, is really taking it to the US Company with millions of consumers choosing Samsung products ahead of those from Apple.

The death of legendary Apple CEO Steve Jobs appears to be having an impact with senior executives quitting recently because the current management team prefer "Apple culture" to putting up with bright skilled people who in delivering the next round of technology have ruffled a few internal feathers.

I remember the days when Apple held press conferences in Australia and journalists could ask serious questions about the Company and their products. Now it's all about Apple spin, "rah rah" shop events and pandering to a select group of journalists who Apple claims "reach the masses".

Three weeks ago a colleague of mine who is a technology journalist was on holiday in the US. He wrote to Apple Australia to ask whether he could attend their press conference in the USA for the launch of their new mini iPad at his own cost. Apple Australia denied his request. He was not one of the chosen few. 
 
In the UK on Friday Sir Robin Jacob said Apple published 'false and misleading' material and he suggested that bosses showed a 'lack of integrity' in the way they tried to manipulate a situation to best suite Apple.

He made his criticisms after the Court of Appeal heard details of the dispute between Apple and Samsung at a hearing in London.

Apple has been slammed for telling judges it would take two weeks to make changes on its website. Apple was also forced to remove code that 'hid' a statement at the bottom of a page instead of at the top.

The statement was an apology to Samsung that Apple was ordered to run in UK publications and on their web site.

The code which Apple was forced to remove by the UK Courts had the effect of forcing the user to scroll down to see a notice that Apple was instructed by judges to publish acknowledging that it had lost an earlier legal fight with Samsung.

Appeal judges expressed 'amazement' about the amount of time Apple wanted to post information on its website.

Sitting in the High Court three judges - Lord Justice Longmore, Lord Justice Kitchin and Sir Robin - agreed with Samsung and said Apple should post another statement.

Earlier a judge at the High Court in London ruled that the Samsung Galaxy Tab was not 'cool' enough to be confused with Apple's iPad.

Prior to Friday's Court hearing visitors to the Apple website had to scroll down to see a link that would explain the US reaction to their legal loss to Samsung.

Samsung complained that Apple had added an account of court proceedings in Germany and the USA which was 'inaccurate and misleading'.

Judges agreed. "What Apple added was false and misleading," Sir Robin said in Fridays written decision.

What is upsetting Apple is that they are not getting their own way in the Courts and with consumers. Apple products are no longer the "smartest" on the block. The iPhone 5 has flaws, it is small when compared to the Galaxy S3. 

One in every nine smartphones sold during the third quarter of 2012 was a Samsung Galaxy S3.

The Galaxy S3 overtook the iPhone 4S as the world's bestselling smartphone according to the latest research from Strategy Analytics, which claims Samsung shipped 18 million units of its flagship device in Q3.

Over the same period Apple only managed to shift 16.2 million units and one thing that Apple does not like is being second best.

In the USA Analysts and Hedge Fund managers are starting to question Apple's performance. Doug Kass of Seabreeze Partners, has grown critical of Apple's latest product announcements and the stock's sharp rise this year. In his latest memo titled "More Bruises on Apple," he describes additional concerns he has with the iPhone 5 and how it stacks up against other smartphones on the market.

"Apple is losing some mojo and mindshare," he says. "This is the first product launch by Apple with no wow factor and much less cool than other products on the market such as Samsung Galaxy S III and HTC One X."

On Friday Apple shares slid to a five-month low yesterday as investors grew more uncertain about its ability to fend off competition and untangle a stuffed up iPhone launch.

Apple lost 20 per cent or $130 billion of its market value last week since hitting a record high in September. A 20 per cent slump signals a bear market on Wall Street.

Many investors are questioning whether Apple can keep innovating and keep ahead of ever-more aggressive competition under new CEO Tim Cook, who took over the company after the death of its chief visionary and co-founder, Steve Jobs, last year.

Cook last week ousted veteran mobile software Chief Scott Forstall - a protege of Jobs' - a move seen as a loss of one of the company's most valuable assets.

Apple is also having trouble meeting demand for the iPhone 5. Chairman Terry Gou of Taiwan's Foxconn Technology Group, Apple's main contract manufacturer, said late last week the company was "falling short of meeting the huge demand" for the phone.

In recent weeks consumers have complained about build quality and poor battery performance with the new iPhone 5 which has a screen considerably smaller than the popular Samsung Galaxy S3.

"For now, everything has been refreshed and all the new products are out," Tim Ghriskey, chief investment officer of Solaris Asset Management said. "There are questions about whether margins have peaked at this company."

Recently consumers and the technology media howled with displeasure at the new release of Apple Maps in the iPhone 5. Not only did the maps look dodgy, they were not accurate.

The perceived lower quality of Apple Maps relative to Google Maps has spawned an enormous amount of blog posts and commentary suggesting that this "mistake" would have never happened on Steve Jobs' watch.

Now one has to ask what is the future for Apple 12 months ago. The Company tried to make a play for the TV market, but Hollywood and TV producers dismissed Apple in favour of relationships with the likes of LG and Samsung.