Friday, March 15, 2013
13. Too Big To Fail?
Many of us have heard the phrase "too big to fail" with regards to the financial crisis and banking situation that happened. It is used to refer to banks and organizations being too huge that failing would cause much more harm than if the government used up their resources to support them. Like wise, an article I recently read regarding the battle between Apple and Samsung has made me rethink whether Apple is at that stage. In the article, it is mentioned that the ITC is considering the impact of a sales ban on the iPhone and iPad, and the initial thought of such a scenario would be that it will cause a lot of outcry and mess among consumers and the public. In this situation, I would say it might be too big to fail, and it has even garnered the support of the public to help minimize the damage that litigation can do to it, even if it means infringing patents. On another hand, I will also like to consider the economic impact of the sales ban. Given that Apple is a US based company, having a sales ban would only damage the US economy because local consumers transfers their money to a foreign company like Samsung instead of retaining it back in the country by transferring to a local company. It is then not in the countries' interest to ban its own product from selling in its very own country. This, I would say, is one of the ITC's greatest fear as they are trapped either way, to be fair and harm the home country, or to be bias and help boost local economy. This may be one of the reasons why the battle between Apple and Samsung has always been dragged out and postponed. It is the innocent consumers and the public that suffers the most in this battle.
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You bring up some very interesting points here. I agree that in a sense Apple may be too big to fail, and if it isn't yet, I believe it soon will be. Widespread adoption of Apple devices and the lack of compatibility between most Windows devices and Apple devices would mean that if Apple were to go down all of these consumers would be left with worthless products going into the future.
ReplyDeletegreat post! it is true that if apple fails (which is very unlikely to begin with, worst case transfer of product lines / ownership? im not sure, please correct me if you think it's not right) consumers are the ones left to suffer (with worthless products like taylor has suggested), however, if they are left with more / better choices of products, are they necessarily worse off?
ReplyDeleteGood point Jerel,
ReplyDeleteIt is really hard for Apple to fail now. They have a lot of cash and are in a very stable financial state. They would be able to pay huge amount of money for settlement, and in the worst case scenario they will pay part of the revenue to the winner in the law-suit. But I doubt there will be a ban on production of their products.
Your point about the ITC's decisions' effect on domestic and foreign economies is extremely valid. It can be extremely difficult for ITC judges and decision makers to be unbiased, given the loyalty to one's own that is difficult to view from an objective perspective. Furthermore, the lobbying of decision makers, in the ITC or elsewhere, is an expansive industry that is self-sustaining, resulting in the perpetual political gridlock that you discussed. It would be nice to minimize the lobbying efforts that take place on a daily basis, but unfortunately, the current system has incentivizes this.
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