Apple Settlement Bad News for Samsung

Apple vs Samsung

Apple was awarded a $1 billion settlement when a jury in San Jose, California, the location of the famed high-tech paradise known as “Silicon Valley” found Samsung guilty of copyright infringement of several Apple designs and features.

Observers and analysts are now asking what the ramifications of this decision will be for Apple and Samsung in particular and the technology industry in general. Will the jury’s verdict lead to a cornering of the smartphone market by Apple over Android-based phones and gadgets? Or is this just the beginning of a long legal battle over the technology of smartphones? Will this decision place other Apple competitors that use Android technology besides Samsung in jeopardy? Android is the operating system developed by Google which is most compatible with gmail and other Google products.

“I am sure this is going to put a damper on Android’s growth,” New York-based Isi Group analyst Brian Marshall said, “It hurts the franchise.”

The jury found that a few of Samsung’s products copied some features and designs which were exclusive to the Apple iPad and iPhone. The verdict also only indicated Samsung, which sold over 22 million tablets and smartphones that Apple says used their own technologies.

“The other makers are now scrambling” to find alternatives, said Rob Enderle, a leading technology analyst based in San Jose.

Apple is now poised to request that about 24 Samsung devices which violated Apple’s patents  be excluded from sales in the United States. The majority of those products are “legacy” devices which have virtually no market now in the US. Lawyers for Apple will also ask the judge to increase the damage award by a factor of 3, asking for $3 billion because the jury found that Samsung “willfully” copied Apple’s patents.

The $1 billion award represents only about 1.5% of Samsung’s annual earnings. According to Jerome Schaufield, a professor of technology at Worcester Polytechnic Institute, the settlement should not do too much harm to the multi-billion dollar global industry.

“Samsung is powerful,” Schaufield said. “The company will regroup and go on.”

About James Cannon

James Cannon is an experienced hedge fund analyst. He has served on the advisory boards for various different Fortune 500 companies as well as serving as an adjunct professor of finance. James Cannon has written for a variety of Financial Magazines both on and off line. Contact James at james[at]