Apple vs. Samsung
On August 6, Samsung Electronics and Apple reportedly reached an agreement to withdraw their patent lawsuits occurring outside the U.S. As a result, much attention is being paid to whether their decision will lead to a final agreement, or it will be part of their strategy to concentrate on the case in the U.S.
This is the first time for both sides to reach any compromise, four years and four months after Apple lodged a complaint with the U.S. District Court against Samsung in April 2011. However, the U.S. firm announced on the same day that it decided to continue to pursue legal action in the U.S.
The patent war between the two tech giants intensified between 2011 and 2012, as shown by the fact that they brought suits against each other in 9 countries. After that, both companies continued existing cases for two years, without bring new legal actions against each other.
In June, the two companies dropped their appeal of last year’s final ITC ruling. At the end of July, Apple withdrew a cross-appeal in its first California case against Samsung. Hence, observers said that both sides might reach an agreement.
In fact, many in the industry pointed out that they will finally make a compromise, since the lawsuits between the two firms involve products released one or two years ago, and therefore winning the case would not bring any practical benefit.
Moreover, the possibility that confidential information about each country will be revealed through court documents imposed a big burden for the two firms. On top of that, legal fees were too expensive.
The lawsuit made consumers, including the jury who deliberated the case, form negative attitudes toward the two companies in that an increasing number of people began to think that at the end of the day, the victims were the consumers. Apparently, this general public perception had an impact on Samsung and Apple's decisions this time.
However, some say that the decision is not the final agreement, because it does not include their lawsuit in the U.S. Even if one side wins a lawsuit outside of the U.S., the company will not benefit greatly by winning the case. Therefore, industry analysts are saying that both of them dropped their case in other countries so that they can focus on the ongoing patent infringement trial in the U.S.
The size of the case in the U.S. is the largest. In the first patent lawsuit, the United States District Court for the Northern District of California ruled that Samsung pay US$930 million in damages for patent infringement.
Even if the two companies withdraw their casees in other countries to concentrate on the lawsuit in the U.S., the patent dispute might escalate, rather than being compromised. Both companies are expected to further use their capabilities in a cross-appeal of the first California case and a second patent infringement lawsuit.
Some say that the two handset makers reached an agreement, owing to the remarkable growth of Chinese smartphone vendors in the global market, where market conditions have been changing very rapidly.
Huawei, Lenovo, and Xiaomi Tech, the three largest smartphone makers in China, have been rapidly growing to the extent that they comprised 17 percent of the worldwide smartphone market in the second quarter of this year. In contrast, Samsung and Apple's combined share amounted to merely 37.1 percent of the total. It means that both companies are slowly losing their grip on the market.
The two companies used to constitute more than half of the global smartphone market, but they began to lose their market share, stemming from the diversified market and the growth of Chinese products.
Hence, observers say that both firms dropped their cases outside the U.S. so that they can focus on their products instead of wasting energy and resources in legal battles.
Nevertheless, given that the rapid growth of Chinese Android device manufacturers is based on the local market, industry analysts stress that Chinese firms' growth alone cannot fully explain why Samsung and Apple agreed to drop their case outside the U.S.