Smartphone Not a Phone, Claims Samsung

Samsung has claimed its Galaxy S7 handset is not a cellphone. The attempt to take advantage of tax rules failed as a court ruled it most definitely is a phone.

The case in South Africa involves the way the country applies import duties to different products. The Galaxy S7 was originally in a category simply called "other" in a subcategory of computers. The South African Revenue Service reclassified it last year in the "multi-functional device" category which is where smartphones normally fall.

Phone Calls a Secondary Function

The reclassification meant Samsung would have to pay more in import duties so it challenged the reclassification in court. It said what mattered was that the S7's primary function was "the connection to the Internet, social media, music and games and not the making of telephone calls." (Source: citizen.co.za)

It called on testimony from an IT specialist who said the presence of apps - which weren't available in early cellphone models - was evidence that telephony was not the main use. The judge in the case noted that Samsung was arguing that the transmission of sound was the key factor.

The South African Revenue Service put forward three main arguments. It said transmission of sound was something of a red herring because some very popular apps such as Skype are all about voice calls.

If It Looks Like a Phone

Secondly, it noted that even an S7 user was running apps rather than making voice calls, the handset was often reliant on phone networks to communicate.

Finally it produced its own witness, an electrical engineering expert, who pointed out that the S7 is - like all smartphones - specifically designed with a speaker and microphone placed so the user can make a voice call while holding the handset to their face.

The judge ruled in favor of the South African Revenue Service, dismissing Samsung's arguments as "disingenuous". She said that despite the range of computer-like features, the S7 was a handheld device with telephony as its principal function, which meant the tax classification was correct. (Source: sammobile.com)

What's Your Opinion?

Do you think of your smartphone as primarily a phone or a computer? Do you agree with the judge's ruling? Can legal definitions really keep up with evolving technology?