Samsung suffered significant defeat in its US patent battle with Apple last month, after a California jury found that the electronics group infringed 6 of 7 patents asserted against it. Apple has been awarded $1bn in damages but the war is far from over and speculation is rife that the real winner could well be Microsoft.
Apple has now been given leave to seek injunctions on more than 20 of Samsung’s products and a hearing has been set for 6 December. Last Friday, Samsung's flagship Galaxy S3 and Galaxy Note smartphones, and its Galaxy Tab 10.1 tablet, were added to the list, by Apple. This case is running in parallel to the just-concluded patent infringement.
Additionally, the damages awarded to Apple could triple if a forthcoming judgment decides that Samsung’s infringement has been wilful.
Consequences for the Android Market
The patents concerned cover design and form factor but also user interface features, such as rubber banding, which are common to many Android devices. This means that the rest of the Android ecosystem may be sucked into the fray, as Apple now has legal precedent where its patents have been tested by trial and been upheld.
Google is already shoring up it’s defence. It contends that most of the claims are specific to Samsung but must also be well aware that it only takes one infringement to cause a problem. So it’s unsurprising that, according to Reuters, Apple’s Tim Cook and Google’s Larry Page “have been conducting behind-the-scenes talks about a range of intellectual property matters, including the mobile patent disputes between the companies”.
However, the rest of the Android community has been left reeling with a mad dash to design around the patents which have been successfully asserted against Samsung.
Analysts are forecasting product delays and higher R&D expenses for those handset makers addressing the US market such as LG Electronics, HTC and Motorola (Google). However some also argue that Apple’s victory could be the driving force behind a push to innovate more in the smartphone industry.
Consequences for Microsoft
Global Technology Marketing Analysts, Nomura Securities think that the real winner in the Apple vs Samsung war will be Microsoft and the Windows Phone Ecosystem. They give the following reasons:
Windows Phone is highly differentiated from Apple and copying or imitation will be much harder to prove should Apple decide to go on the offensive as it begins to ramp its volumes.
As Android and Apple tear each other apart, Microsoft has been waiting in the wings and is in a very good position to move in and entice users to switch from Android to Microsoft,
With the Windows 8 launch nearing and a range of innovative and new form factors about to hit the market, Microsoft and its partners could benefit as users and developers are distracted regarding sustainability and availability of Android devices.
Nomura is touting for Microsoft, Asustek, Samsung and Catcher as ways to invest in Windows 8, with the most exposed by far being Nokia which, they say is likely to be the leading vendor of Windows Phone products.
However, a turn in Nokia's fortunes is far from certain. According to Forbes:
Microsoft is going to be looking to press its advantage in the wake of the Samsung/Apple case, stressing the legal risks attached to Android, and looking for opportunities to sign up as many licensees for the cutting edge version of Windows Phones as it can. The prospect of Samsung, LG, HTC and a host of other OEMs all jumping aggressively into the Windows Phone market in competition with Nokia would have some benefits to the company; there would likely be an expanded range of apps, for instance, if the platform gained more share. But it would also mean more intense competition for Nokia on features, design – and price.
At Nokia World, (Sept 3-5), new Windows devices that are at least upgradeable to Windows 8 are now expected to be launched but the event will need to leave an impression on the mobile community.
Consequences for Samsung
Samsung may have lost the first battle but the case is still open for appeal and the company is entitled to fight the decision all the way up to the Supreme Court - a process that could take years.
The key factor, for the company, is the December hearing, which will decide which of its products are to suffer injunctions. If injunctions are granted and not stayed, then it will be a long time before they can be lifted, creating a dip in Samsung product shipments until Samsung can launch new, non-infringing products to replace them.
On the plus side, Samsung has several new products in the pipeline (or recently launched) that work around Apple’s patents so the damage on future businesses is likely to be not as great as some predict.
Additionally, a big focus of future smartphones is likely to be the new screen technology (plastic and bendable screens). However, Samsung failed to debut the new technology as was widely rumoured, with the Samsung Galaxy Note II. last week and the new model’s US future is already in peril pending December’s judgement.