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A trial could deeply hurt the pair's relationship, regardless of the outcome

Samsung Electronics Comp., Ltd.'s (KSC:005930) and Apple, Inc. (AAPL) will have one final talk before they take their case before a federal court jury in the United States, in a war that could limit U.S. consumer selection or grant artificial dominance in the smartphone market.

I. A Bitter Battle

As the world's largest display manufacturer and a top maker of DRAM, NAND, and mobile CPUs, Samsung is vitally important to Apple.  Samsung makes the system-on-a-chip (SoC) brains inside every iPad and iPhone.  

Yet in 2010, growing competition between the pair in the tablet and smartphone space prompted late Apple CEO Steve Jobs to accuse Samsung of "slavishly copying" his company's devices, filing suit in U.S. District Court for the Northern District of California.  Samsung hit back shortly thereafter, and the war was on.

The court battle has been fierce.  

Judge Koh
Judge Koh has admonished both sides in the case, at times. [Image Source: IB Times]

Judge Lucy Koh has admonished Apple's lawyers for belligerent filings, while earlier chastising Samsung from destroying potential evidence.  

The case currently dangles in the realm of subjectivity.  

While emails and internal documents demonstrate that Samsung was indeed looking to imitate traits of Apple's highly successful star tablet/smartphone, Apple was shown to borrow ideas for those devices from Samsung, Sony Corp. (TYO:6758), and other players who predated its market entry.

There are some visual similarities between Samsung's original Galaxy S smartphone and the iPhone -- likewise for iPad and Galaxy Tab.  There are also noticeable differences.  

At the end of the day much of Apple's design claims boil down to its assertion that it "owns" exclusive rights to produce rectangular tablets/smartphones with rounded edges.  Apple claims that some tablets/smartphones may be sufficiently different from the iPad/iPhone to escape design infringement, but its design experts have struggled to quantify discrete details of how Samsung and others can escape design infringement.

II. One Last Effort at Peace

Amidst this backdrop Samsung CEO Kwon Oh-hyun will call Apple CEO Tim Cook, in a final chance at settlement before the trial heads to the jury for a verdict.

Tim Cook and Kwon Oh-hyun
Apple CEO Tim Cook (left) and Samsung CEO Kwon Oh-hyun (right) will have one last attempt to make peace. [Image Source: Reuters (left); Bug.hr (right)]

At stake in the battle is the $219.1B (valuation by Bloomberg) smartphone market.  Combined with the tablet sector, these two markets could easily eclipse a trillion dollars in the next several years.

Apple would love to gain a monopoly in the smartphone market, to complement its dominant position in the tablet space.  But it has seemed sluggish in advancing the experience of its handheld devices opting for a slower pace of changes than Android.  As a result Android devices today have many capabilities and hardware advantages that their Apple counterparts do not -- such as larger screens, LTE modems, and near field communications.  Those factors have given Android phonemakers approximately 68 percent of the global market at last count [source].

To counteract that, it’s taken up the sword.  Apple is looking for $2.5B-$2.75B USD in infringement damages, as well as multiple sales bans on Samsung product -- a crippling outcome.  It is still pursuing similar terms in its case against HTC Corp. (TPE:2498), as well.  In the U.S. only Motorola Mobility -- a Google Inc. (GOOG) subsidiary is free from the wrath of Apple, after the pairs legal strife was twice dismissed "with prejudice" by a federal judge.

III. Samsung Presents Quandary for War-maker Apple 

The Samsung case is made unique by two factors.

First, Apple and Samsung are expected to do $12B USD in business in 2012, up 50 percent from the $8B USD in 2011.  Without Samsung's chips Apple could not make its products.  Fortunately, regardless of the lawsuit outcome, Samsung is contractually obligated to provide those chips to its archrival.  But the danger for Apple comes for the future.

If it hurts Samsung too bad, Samsung could retaliate by refusing to renew chip production contracts.  And given the level of design expertise employed by Samsung in making the chips -- particularly the SoC -- that could amount to almost a redesign for Apple of its smartphone chips.  Further, quality would likely suffer -- initial trial runs with third-party fabs reportedly did not go well for Apple; it was hard for them to match savvy Samsung's level of chip-making prowess.

Samsung iPhone 4S
Without Samsung, the iPhone could get a lot dumber. [Image Source: Snapguide]

Second, Samsung is the largest of the Android phonemakers, and the only one to approach Apple in profitability.  However, the promise of killing Android's superstar offers powerful motivation in the other direction -- for war.

It was Judge Koh who suggested the second peacemaking effort, with Samsung and later Apple agreeing.  The Judge called herself "pathologically optimistic" in her hope that this second round of intimate talks between company chiefs would produce a different outcome.

If it does not, the jury should be in for an arduous trial, as both companies -- after initial reductions -- argued that they were unable to further reduce their claims or exhibits.  At least one member of the jury has family members who reportedly hold a significant number of shares of Apple stock, something Judge Koh said was okay, as the individual themselves would not directly profit off of damaging Samsung and boosting Apple.  Still it's hard to imagine that couldn't introduce a certain level of bias in that member's mind.

Source: Bloomberg



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Apple WANTS a fight, not a settlement
By topkill on 8/20/2012 4:22:36 PM , Rating: 4
Apple believes that the best way to make profit is to sue everyone else out of existence. They have no intention of competing on a level playing field because their margins would be destroyed.

Won't work.




RE: Apple WANTS a fight, not a settlement
By BugblatterIII on 8/20/2012 5:53:37 PM , Rating: 4
Apple has pretty much stopped innovating in the phone space.

Because of that they're aggressively defending their previous innovations, many of which weren't really theirs or were trivial, and taking advantage of a broken system that allows them to patent those things.

Hopefully Apple will get its arse handed to it and the patent system will be torn down and rebuilt into something fit for purpose. Can't really see Koh helping with that though...


RE: Apple WANTS a fight, not a settlement
By macdevdude on 8/20/12, Rating: -1
RE: Apple WANTS a fight, not a settlement
By dgingerich on 8/20/2012 6:48:34 PM , Rating: 5
quote:
How can an invention by you not be yours.


um...
slide to unlock: used for centuries to lock doors, not a real invention, let alone innovation - patented by Apple

rectangle: used for centuries, pretty simple, rectangular tablets have been used in sci-fi for decades, dating back to the 50's on TV and in movies, even further than that in books by Robert Heinlein and Issac Asimov (one such item described in Second Foundation in pretty good detail) - patented by Apple

icons on a screen: used for decades on all sorts of computer interfaces. It's kind of a "no duh" default interface for many things - patented by Apple as their "iPhone and iPad experience"

All things Apple claims as an "innovation". They clearly exploit the patent system. They didn't invent any of it. They don't even come close to deserving anything for this. It's not innovation, it's taking what the customer wants and presenting it to them. It's what has been asked for by customers for decades. To claim this as "innovation" is like claiming pairing scrambled eggs with bacon is "innovation." Talk about super lame. Apple is exactly that.


RE: Apple WANTS a fight, not a settlement
By macdevdude on 8/20/12, Rating: -1
RE: Apple WANTS a fight, not a settlement
By Master Kenobi (blog) on 8/20/2012 7:48:44 PM , Rating: 5
I can't decide if you are being sarcastic or a complete pompous ass. Either way is brilliantly pulled off, aside from the latter being little more than trolling.


By nikon133 on 8/21/2012 12:51:17 AM , Rating: 2
You are joking, right? Douche is as pompous as ass can be.


By BugblatterIII on 8/20/2012 10:22:32 PM , Rating: 5
Apple wasn't the first to have slide-to-unlock on a touch screen. Haven't you been paying attention? The video's been posted on DailyTech many times.

I was a little late to the PDA party; I got my Pocket Loox 720 in 2004. It was a full touch-screen device; optimised for a stylus but I also used my finger. A couple of years later phone functionality was added into PDAs and the smartphone was born. Can't remember any that weren't rectangular to be honest.

What Apple did was use capacitive screens rather than resistive and optimise for fingers rather than styli. They may have been the first to do that or they may not, but they absolutely did not invent capacitive screens or fingers.

Still think Apple invented the rectangular smartphone? Of course you do; you won't let little things like facts get in the way.

Apple's icons were basically Web 2.0 style. It's a normal icon that everyone's been using for a decade or so but they put a rounded box around it. Obviously anyone who puts a box around an icon should now pay Apple billions of dollars and have their products banned.

Why does Apple make so much more money? You'll never go broke appealing to the lowest common denominator. Apple makes tech products that appeal to non-techies and markets them brilliantly. The innovation, especially in the past two years, has been minimal. Hell, I was using my PDA to play music, read books, watch movies, browse the web, do emails and play games in 2004!

In this business you need to keep innovating to keep on top. Apple will carry on making billions and the iPhone5 will sell fantastically, but the rot's set in and the decline will soon follow.

I wouldn't buy an Apple device but I'll miss the way they've helped to keep the industry moving forward.


RE: Apple WANTS a fight, not a settlement
By dgingerich on 8/21/2012 1:27:59 PM , Rating: 3
oh, wow. I didn't check back with this until today. This guy truly is drunk on their cool-aid, huh? There obviously won't be any convincing him. He's just too brainwashed to be retrieved.


By Cheesew1z69 on 8/21/2012 1:36:36 PM , Rating: 3
quote:
He's just too brainwashed to be retrieved.
That's been known for some time now... he honestly believe Apple invented everything. Even when shown FACTS that prove him wrong. But...anything you say or prove to him, it's not logical, or it's irrelevant or it's not true. But everything he says, is relevant, logical and true.

A complete FuckTwat is all he is..


By tecknurd on 8/20/2012 7:33:50 PM , Rating: 3
quote:
Apple invented pretty much every innovation in the phone space.

Stopped innovating? Have you seen iOS 6? Better voice recognition? Vector maps? Canned message replies? Facebook integration?

Nope, they just took or copied someone else's and stated as Apple's by patenting them.

Vector maps or vector images is not invented by Apple. Facebook is integrated by other web sites, so Apple did not invent that. "Canned message" is simple psychological thinking and not an invention. Better voice recognition is not an invention. Nuance Dragon Naturally Speaking is the one of the best voice recognition, so saying that Siri is better is just stupid. Siri is just a copy cat compared to Dragon Naturally Speaking. Turn by turn navigation is alread in Android way before iOS had it. Before iOS has it built-in, iPhone users have to use an app and they did not compete well against Android's built-in navigation.

quote:
Not gonna happen. I predict a complete U.S. ban. Then you suckas will be purchasing iPhones -- well, those of you who aren't trolls on welfare and can actually afford one (which i guess isn't many Android users).

Otherwise enjoy your food stamps, smelly droidtards.

Not going to happen to high degree that you said in the US. Banning Samsung to sell any cellphone in the US affects capitalism in the US. People buy Android based tablets and cellphones because there are more choices. These choices comes down to the carriers. AT&T, Verizon, and Sprint are more expensive compared to T-Mobile if I want to be able to use the high bandwidth that 4G provides. I could go with Sprint with its unlimited cap, but its highest speed in my area is 3G although that is only a few areas where I live. iPhone will just suck because I have to pay a lot of money just to use the iPhone. Siri will suck up all the bandwidth, so I have to pay more. Android's voice recognition is done right on the phone instead of going through servers for processing to get an answer.

Android 4.1 is actually far exceeding iOS. iOS 6 just add features that Android had and then polish it up.


RE: Apple WANTS a fight, not a settlement
By BugblatterIII on 8/20/2012 9:16:14 PM , Rating: 5
Wow; I got called a troll by macdevdude! Do I get a prize?

If a troll calls you a troll does that make you not a troll or a troll squared?

Dude (can I call you Dude?) if you think Apple invented the things it's patented then you presumably never saw a smartphone or PDA before the iPhone.

Unfortunately there's a large section of people who think that if it was on the iPhone then Apple must have invented it and therefore everyone else copied them. Apple copied just as much as everyone else, if not more. Their huge success made them seem like the innovator to people who'd never seen these things before.

To be fair they did bring a focus on the user experience that had been sorely lacking, and their amazing marketing brought what us geeks had been doing for years to the masses. Nothing that should be patentable though, and now they've lost their way.

Even Apple advocates aren't arguing that iOS6 innovates; they're saying it consolidates an already great OS. And for what it does it's great; it doesn't do enough for me so I use Android.

Apple will still innovate in other areas but I think they've taken the iPhone pretty much as far as they can and now they're playing catch-up.


By Natch on 8/21/2012 8:35:31 AM , Rating: 3
Not sure if it's true trolling, in the purest sense of the word.

You see, it's simply a matter of Apple's fanboys are incapable of believing anything that wasn't put out by Lord Steve, or his padawan, Tim Cook. They're the ultimate in cult worshippers (and you thought Scientologists were bad!).

They are sort of fun to bait though, aren't they?


By DJ Brandon on 8/20/2012 10:04:39 PM , Rating: 2
Okay, troll, are you nuts?

You mad bro?

Anyone can use trendy internet sayings to make themselves feel smarter and above people. How about using an intelligent debate for once as opposed to gripping to a stupid internet insult. The word "troll" is far overused and abused in an attempt to dignify ones superiority to others. In a sense wouldn't using the word troll constantly make yourself one?

::patiently waiting to be called a troll for trolling::


By Cheesew1z69 on 8/21/2012 8:32:21 AM , Rating: 1
Once again, they don't INVENT ANYTHING...you ignorant fucktwat...


By elderwilson on 8/21/2012 8:51:47 AM , Rating: 2
Wow, you are really emotionally invested in something that you play no part in. It is like those crazy people that think they have a personal relationship with celebrities because they are obsessed with them.

This whole apple/android argument needs to be taken back a notch (or three).


By weskurtz0081 on 8/21/2012 9:09:19 AM , Rating: 1
quote:
Stopped innovating? Have you seen iOS 6? Better voice recognition? Vector maps? Canned message replies? Facebook integration?


Am I missing something? Vector maps is not new, Android has been using vector maps for over 2 years. Canned message replies? That's been around for quite some time now as well, I just assumed the iPhone had this already. Better voice recognition? Yeah, Androids VR is improving as well.


RE: Apple WANTS a fight, not a settlement
By Tony Swash on 8/20/12, Rating: -1
RE: Apple WANTS a fight, not a settlement
By momorere on 8/20/2012 6:05:27 PM , Rating: 3
And ???? Not everyone buys something. I'm sure gas stations have had billions of customers each month while a good 99.95% of them end up buying gas or other items. Yet ANOTHER invalid/useless "fact" posted by you. Keep it up as we all enjoy the free entertainment.


By name99 on 8/20/2012 7:30:25 PM , Rating: 1
quote:
And ???? Not everyone buys something.


When you are mocking someone on the internet, you really ought to be sure about what you are saying. Otherwise you come across as just one more fool saying what he thinks without a clue as to reality. (cf Todd Akin)

The average spend of a customer in an Apple store is astonishingly high --- about $50. Obviously there are many customers who don't spend, but there are also many customers who spend a lot more than $50. It averages out to a pretty damn large number. The profit per customer visit is about $10.
This is vastly more than gas stations or malls. It is also well-known (among those who actually look into the matter rather than making up their own facts) that Apple stores are the single most profitable retail spaces on the planet, with higher profits per square foot than upscale retailers like Saks or Tiffanys.

You can mock all you like about "invalid/useless "fact" "s, but it won't change those numbers. And in the real world, of people who take money seriously, those numbers matter. I assume you saw today's news:
http://www.reuters.com/article/2012/08/20/us-apple...


By retrospooty on 8/20/2012 6:09:16 PM , Rating: 4
"Apple knows it can't stop the copying"

Of course Apple cant stop copying. They would have no new products if they didn't copy other companies tech...

My only question is why do they sue others for copying what they themselves copied.


RE: Apple WANTS a fight, not a settlement
By dgingerich on 8/20/2012 6:55:57 PM , Rating: 2
I find it funny that people call Apple's copying of Sci-fi concepts, market trends, and plain old concepts that have been in use for decades to centuries "innovation."


RE: Apple WANTS a fight, not a settlement
By Tony Swash on 8/20/12, Rating: -1
By momorere on 8/20/2012 8:18:09 PM , Rating: 3
It is sad that Apple copied (I mean invented) so many designs from a single company/designer from 50 years ago.

http://gizmodo.com/343641/1960s-braun-products-hol...


RE: Apple WANTS a fight, not a settlement
By Iketh on 8/20/2012 10:27:08 PM , Rating: 1
lol, of course someone can invent a warp drive... you can begin your debate after someone invents it and then sues someone else that does the same thing...

THAT is the analogy, please try to think


RE: Apple WANTS a fight, not a settlement
By Tony Swash on 8/21/12, Rating: 0
By Iketh on 8/22/2012 11:35:48 AM , Rating: 2
No one said you're not allowed to patent a warp drive..... What is wrong with your head?


RE: Apple WANTS a fight, not a settlement
By dgingerich on 8/21/2012 1:41:08 PM , Rating: 1
The moment someone invents a warp drive that uses anti-matter and "dilithium crystals" to generate a warp plasma, send that through mysterious "warp coils", and generate a "warp field", yeah, they won't be able to patent that. (Don't get on me about warp drive, I was a Star Trek expert back in my younger years, and I'm not ashamed of it.) However, the current patent system would allow someone to patent a "warp drive" based on the basic concept of altering the space around an object, regardless of how it is performed, and that is specifically what is broken.

The fact of the matter is that certain things are completely made up, like Star Trek's warp drive. There is no foundation in science for how those work. The basic concept is there, but the mechanics is what matters.

Yes, Apple should be allowed to patent the specific way they built their iPad and iPhone, as far as battery construction, circuit layout, and screen layout, if they invented it. (They didn't invent the layout of their touchscreen, though, as that was invented far earlier, and they just copied Mitsubishi's layout, under license.) They should be allowed to patent their way of detecting a finger slide across the screen, or multi-touch gestures even, if they invented it. (In case you were wondering, they didn't, as that was invented back in the mid-90's.)

No, they shouldn't be able to patent a simple flat rectangle, as that has been in science fiction for decades, and they did nothing to innovate that. They should not be allowed to patent anything general, like multi-touch gestures or finger sliding in general, only the technique on how they detect and manage it. There is nothing innovative on general concepts, only on how to do it.

Edison didn't get a patent on electrically generating light, only using certain filaments to do so. If he had been able to patent that, as he would under the current system, we would all be paying $100 for a lightbulb these days, and most of us would be in the dark.

Don't get on me about the particulars. I know exactly what's wrong with the system: lawyers.


By Cheesew1z69 on 8/21/2012 1:44:10 PM , Rating: 1
quote:
(In case you were wondering, they didn't, as that was invented back in the mid-90's.)
Actually, no one is wondering. We all know they don't "invent" things. They take existing technologies, and package them.


By elleehswon on 8/20/2012 7:57:41 PM , Rating: 4
quote:
Meanwhile in the real world Apple stores saw 300 million visitors in FY 2012.

300 million


...probably all returning iphones with cracked screens


"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer














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