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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); (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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RE: Apple WANTS a fight, not a settlement
By macdevdude on 8/20/2012 7:11:17 PM , Rating: -1
Invention: Applying existing components and innovations to a new application
slide to unlock: used for centuries to lock doors, not a real invention, let alone innovation - patented by Apple
Umm doors did not have touch screens. Touch screens require complicated heuristics to track figure movement.
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
Apple was the first to apply this shape to the smartphone with a full touch-screen device. So YES it did invent the rectangular smartphone Droidtard.
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"
Umm, then how come Samsung's were different than the iPhone pre-iPhone, but then everyone love's Apple icons so Samsung steals them. Yes, Apple "owns" those, tard.
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.
You are "super lame". If it were up to you legit innovators like Steve Jobs and Apple would be left out on the street, while the Chinese, Taiwanese, and South Koreans would steal their work and flood the market with clones.

Apple invents, Android copies.

Think about this DroidTards: if Apple didn't invent most of what makes a smartphone, how come it makes 50x the profit of anyone other than Samsung (who clearly ripped it off)?

On Anandtech, you trolls would be laughed off the boards. Here, it's whacko world and everyone seems to think it's okay to steal.

RE: Apple WANTS a fight, not a settlement
By Master Kenobi 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
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..

"When an individual makes a copy of a song for himself, I suppose we can say he stole a song." -- Sony BMG attorney Jennifer Pariser

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