Apple – Samsung Patent Ruling

A jury in California has ruled that Samsung Electronics Co., Ltd. (KRX:005930) had copied features of the iPhone and iPad and awarded Apple Inc. (NASDAQ:AAPL) over $1 billion in damages. At the same time the jury rejected Samsung’s counterclaims against Apple. A Samsung appeal is certainly expected. But first a hearing is set for September 20th where Samsung will try to get charges reduced or dismissed, while Apple will seek punitive damages that could triple the award.


Apple is also seeking a U.S. sales ban on some mostly older models of Samsung smartphones, including several Galaxy models and the Droid Charge. Apple reserves the right to seek bans on additional Samsung devices.


For Apple, this case is part of a multi-country battle for dominance of the smartphone and tablet markets. The ultimate target is Google and its Android operating system.


For Samsung, Google and the larger market of manufacturers and software developers dependent on Android, predictions of the ruling’s impact range from insignificant to something of a disaster. Given Samsung’s huge size, financial strength, global reach and broad range of products – on top of the fact that most of the phones Apple is seeking to have banned are older models that don’t sell so much anymore – it’s hard to seek this as a devastating blow for Samsung. But the company’s share price is down a little over 6% since the ruling compared to a 1% drop in the Korean Exchange’s KOSPI index. The company vows to maintain the availability of its products on the U.S. market.


Also, by almost all accounts there are workarounds to the patent issues and in any case the smartphone market is developing and changing rapidly. And Samsung and other manufacturers are working with Microsoft to offer Windows-based devices this year. While there may be some temporary pain, it’s hard to see any significant long term damage (except possibly to Google if market players move away from Android) arising from this ruling.


The Samsung group is the largest maker of mobile phones in the world. The company “is a global leader in semiconductor, telecommunication, digital media and digital convergence technologies with 2011 consolidated sales of US$143.1 billion. Employing approximately 206,000 people in 197 offices across 72 countries.”


Apple “designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players, and sells a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications.”




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