Does Apple's $1 billion courtroom defeat of Samsung
reflect diminishing U.S. innovative prowess?
Apple vs. Samsung: More Proof that American Industry
has Lost its Edge (JoongAngIlbo,
entirely wrong to assert Americans discovered, invented and created almost
every cutting-edge technology. They were great builders - but not such good defenders.
... Without deep self-reflection and a dedication to innovation, a strategy of
relying on past supremacy will fail to save the American economy."
It was hardly surprising: In a legal battle over smart phone
technology, a jury in San Jose, California, delivering a one-sided verdict in
favor of Apple over Samsung Electronics. This is the “American style” of doing
things when their interests are threatened. In every economic and business
battle, this is the yardstick Americans stick to. Anything Americans aren't
leading reflects something evil and dangerous.
When Apple embarked on its legal crusade against smart phone
rival Samsung, we were reminded of the trade friction over semiconductors 30
years ago between the United States and Japan. The clash over memory chip
technology was one of the first head-on industrial battles between the manufacturers
of two countries - and it later developed into a U.S.-Japan trade conflict.
The , which in 1985 represented
American chipmakers hit by a drop in sales, filed a petition with the U.S.
Trade Representative accusing Japanese chip makers of unfair trade practices.
Micron Technology sued Japan's DRAM
chipmakers for “predatory” business practices and below-cost product dumping.
Intel, Advanced Micro Devices and National Semiconductor
also ganged up on Japanese companies, filing an anti-dumping suit against
Japan's EEPROM chip makers. The following year, citing the
plight of American industry, the U.S. Department of Commerce slapped punitive
countervailing duties of between 21.7 percent and 188 percent on Japanese chip
Japan half-heartedly signed a semiconductor trade deal in
which it promised to boost the American share of the Japanese market by up to
20 percent. When, for obvious reasons, American chip sales failed to pick up
the following year, the U.S. Congress passed a resolution demanding that the
government take punitive measures against Japan for failing to honor the 1986
Washington pounded Japanese electronic imports with punitive
tariffs, imposing as much as 100 percent duties on Japanese televisions. Interventionist
trade actions on the part of Washington to contain Japanese electronics
producers continued until the mid-1990s.
Posted by Worldmeets.US
Anti-Japanese sentiment peaked during the battle against "outperforming"
Japanese semiconductor producers. In a poll by The Washington Post and ABC,
70 percent of respondents feared that if the U.S. administration didn’t act
quickly, the Japanese would buy up all of America!
U.S. media went in anti-foreign frenzy. Americans went on to
employ antidumping and punitive tariffs in similar trade wars in which Korean
companies often fell victim. But in the new mercantilist war, Korean companies
are being targeted with a new, more advanced weapon called the "patent."
The strategy, however, remains more or less the same.
The victor of the U.S.-Japan semiconductor war was neither
of the two. It was Korea. Intel and other U.S. firms pulled out of the overly
competitive memory chip business and Japanese companies, weary from their lengthy
battles with the United States, slowly gave up the fight. Korean manufacturers
went on with innovation and efforts to cut production costs, in the end becoming
the market leader.
During ancient China's warring states period, an adviser in
the Jin Dynasty told the emperor of a winning strategy to capitalize on a
lengthy war between the Han and Wei states: “When big and small tigers fight,
the small one will die and the big one will be wounded. If you hit upon the big
tiger still recovering from the earlier fight, you can win over both states.”
Building a country and defending one are two different
things. It isn't entirely wrong to assert Americans discovered, invented and
created almost every cutting-edge technology. They were great builders - but
not such good defenders. If they hadn't been so self-indulgent with their
pioneering work and endeavored to innovate and remain on top of the market, the
latecomers would never have dared jump into the fray and attempt to outperform
But somewhere along the way, American cars and
semiconductors became mediocre and failed to appeal to consumers. Blaming competitors
for their underperformance hasn't helped American industry before - and won’t help
One newspaper article asked whether Apple, having lost its
drive to innovate, can survive and win by simply appealing to American
patriotism. Without deep self-reflection and a dedication to innovation, a
strategy of relying on past supremacy will fail to save the American economy.