The down side of this tactic is that now Apple has claimed they are the innovator for the world (Tim Cook has been quoted as saying this). When you make this bold of s statement you have to back it up with products and actions. Instead of giving the market new and “innovative” products Apple has pushed out a slight longer iPhone that follows the existing market trend of using a larger screen and a 7-inch tablet that is little more than a copy of devices that many companies have been producing for more than 2-years. There is no innovation there and the market is reacting to this as we expected they would. You see the core of Apple’s faithful will always buy their new products so they will sell well, but the rest of the market (the part that made Apple what they are) are not impressed and see no reason to upgrade.

Because of their actions Apple’s stock has slipped and pretty badly. After a 52 week high of $705 and multiple analysts’ orgiastic claims of Apple hitting $1,000 per share by the end of 2012 Apple slipped under $600 per share yesterday (they are currently at $604). Apple is blaming supply shortages for poor production levels, but looking deeper shows that the sales are not there. Apple is still shipping products, but people are not buying them like they have with previous generations. The iPad 3 did not sell as well as Apple would have liked and now they have a slightly updated iPad 4 (with a lightning connector) and an iPad Mini. They are hurting their core market by doing what they have claimed they do not do; have multiple products of the same type on sale at the same time.  They are diluting their own market which removes the elite feeling of the iPad and possibly the iPhone and iPod as well.

Somewhere Apple knows this is happening, but they do not want to do anything about it. Instead they are relying on old designs and market perception about their products to win sales. On top of this they have gone on a smear campaign against their major competitors including HTC, Samsung and Motorola. If you read the statements that Apple has made about these companies you will see they are almost identical. Apple openly accuses them of “slavish copying” in as many press releases as they can. They even get popular and well liked executives to parrot this increasing the chance that the market will accept their version of the story. This got them into trouble in the UK were they continued to claim this even while a trial was going on to determine if this was the case. In the end Judge Colin Briss found that Samsung did not infringe on Apple’s design patent. To counter the mass amounts of bad press that Apple was spewing to the public in the UK (with the help of many “sympathetic” media outlets) the same judge ordered Apple to produce a statement to the effect that Samsung did not infringe on Apple’s patents and that they (Samsung) did not copy Apple.

True to form Apple has done this with as much spin as possible and have also managed to break the original order. You see the order was to state that Samsung did not copy Apple and that their products were not infringing Apple’s patents. Apple did put this in, but in a way that mocks the judge’s intentions. They managed to make it clear that they still feel that Samsung does copy despite the fact that they have been found not guilty of the crime Apple is trying to pin on them. The full statement can be found on Apple’s UK website. If you try to find it on your own we wish you luck as Apple has buried it quite well to make sure that the average consumer will never see it. We wonder if Judge Briss will view this statement for what it is; a continued claim that Samsung is a copycat and infringes on Apple’s patents and hold Apple in contempt of court.

Here is the line that we think will make all of the difference in terms of contempt for Judge Briss’ order:

“However, in a case tried in Germany regarding the same patent, the court found that Samsung engaged in unfair competition by copying the iPad design. A U.S. jury also found Samsung guilty of infringing on Apple's design and utility patents, awarding over one billion U.S. dollars in damages to Apple Inc. So while the U.K. court did not find Samsung guilty of infringement, other courts have recognized that in the course of creating its Galaxy tablet, Samsung willfully copied Apple's far more popular iPad.”

The statement is very misleading as the Jury in the US did not find that the tab infringed on Apple’s design patents (which is what the case in the UK was about). So again Apple has found a way to maintain their inaccurate claims against Samsung and to thumb their nose at the High Court in the UK. Even with this spin Apple does not want people to know that Samsung was found not guilty of infringement and copying so they have buried this on their website. This act shows that Apple feels they are above the law and also that they can do what they want while expect everyone else to bow to their claims and demands. This attitude will continue to have a corrosive effect on Apple’s stock as will the potential invalidation of a few of Apple’s core patents. The “rubber band” patent is already on the block and we are hearing that a few more will follow. Apple could quickly find themselves the loser as their core arguments are removed from the table. When (not if) that happens Apple will have very little left to compete with except rehashes of the same old products they have been pushing for the last few years.

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