Must Read: No niche for iPad: Why I returned mine

Topic: Mobility

Samsung's high Apple patent stakes: A third of its value

Summary: Samsung CEO Kwon Oh Hyun will reportedly have a chat with Apple CEO Tim Cook to see if a high-stakes game of patent poker can end.

Larry Dignan

By for Between the Lines |

Samsung's valuation as a technology giant largely depends on how its smartphone unit performs. According to Trefis, nearly a third of Samsung's market capitalization is pegged to its smartphone business.

Given that fact, it's no wonder that Samsung CEO Kwon Oh Hyun is having a chat with Apple CEO Tim Cook about the company's patent lawsuit in a San Jose federal court, according to Bloomberg.

The catch here is that Apple's value is basically completely tied to its smartphone and tablet business. Sure, there's Apple's reported entry into the television market (somehow). And then there's the Mac and the declining iPod franchise. But Apple's value is all about the iPad and iPhone.

Apple vs. Samsung with a side of Sony: Vertical integration wars | CNET: The ABCs of Apple v. Samsung 

Should a jury decide Samsung is in the wrong, it's valuation and smartphone business could be seriously disrupted. Should a jury go against Apple, then Cook will have a lot more quarters to worry about. In any case, it's clear the stakes are too high. If you toss in the fact that Apple and Samsung are also partners, this relationship is complicated. A deal is unlikely, but can't be completely dismissed.

That's why Hyun's meeting with Cook is so critical. Hyun would have no shot with Steve Jobs, but Cook is more pragmatic. Clearly, Cook could see the downside of a loss to Samsung. Samsung has filed its own patent suit and wants $399 million in royalties. Apple wants $2.5 billion to $2.75 billion in damages. The two companies have more than enough resources to pick a number in the middle and send the lawyers around the globe home. 

Of course, whatever the jury decides will be appealed by whatever side loses. But the pragmatic approach would be to come up with a settlement that preserves competition and the billions of dollars that flow between the two companies via semiconductors and screens of various sizes.

Topics: Mobility, Android, Apple, Samsung

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138 comments
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  • All this fuss over a rectangle with rounded corners

    Right or wrong, this is how the world sees Apple right now. Will that anger over Apple's abuse of our patent system spill over into lost sales? Impossible to tell but I for one am glad to see that Apple's "can't touch this" aura has gone forever. People are upset about Apple's behavior and are voicing their concerns.

    Ironically, this is better for Apple and those who defend Apple to the death since it can only result in better Apple products. As an Apple product owner who has been extremely disappointed with the upgrades Apple has released since, I'm looking forward to Apple feeling scared about the competition. Right now, based on the iPhone 4S and the iPad 3, Apple is clearly not scared of anything, and it shows. And no, that ISN'T a good thing.
    toddbottom3
    Reply 29 Votes

    • You know, every time you

      use that talking point, you look even more ignorant. You really need to get up to speed on trade dress. For example, the logo you use in your posts could be considered part of a trade dress lawsuit even though its nothing more than a retangle (been around for thousands of years), a picture (been around for over a century), and a couple of bull horns (been around since there have been cows).
      baggins_z
      Reply 6 Votes

      • Apple lost this one in the UK

        Will they lose it in the US? Don't know. However, YOU are the one who is ignorant if you believe your opinion trumps that of a real live judge. The judge was so disgusted with Apple's behavior that he actually ordered Apple to humiliate itself on its own website. While that order is unlikely to stand up on appeal, it does show that those who are actually FAR more involved and knowledgeable about the case than you are, are DISGUSTED by Apple's attempts to punish any company who dares release a rectangular smartphone with rounded corners. I'll take that judge's words over yours, no offense.
        toddbottom3
        Reply 18 Votes

        • Apple in UK

          Actually they did not lose the suit, they just weren't awarded any damages.
          hayneiii@...
          Reply 4 Votes

          • Ask any itard

            and they actually believe that's true. How sad.

            I really hope the appeal fails so we can see how they word the cringe-worthy message apologising for trying to BS the world (verdicts in other territories pending).
            Little Old Man
            Reply 5 Votes

          • I plan

            on creating t-shirts of it so the world can keep a copy.
            timspublic1@...
            Reply 2 Votes

          • I'd buy one

            So, mark me down for one 4XL, okay?
            AudeKhatru
            Reply Vote

          • I really hope so

            Apple needs some public humiliation.
            Jimster480
            Reply Vote

          • Apple was created with stolen technology.

            Apple's lawsuit is Ludicrous to say the least. What they have just done is open a pandoras box that can only hurt the consumer. To try and prevent competition Apple has resorted to suing anyone that dares compete with it. If Apple wins this lawsuit this will be the beginning of Merchantilism and restrictions on free trade.

            Eighty five percent of the hardware in Apple is manufactured by other companies and the iPhone only works as a Smartphone thanks to the manufacturers of wireless infrastructure. If I was Apple I wouldn't push my luck to far, at best Apple might win a Pyrrhic victory, however in pursuing these frivolous lawsuits they will begin to alienate even their own fans.

            What Apple needs to do is innovate rather than market their Hyperbole. Halo effects don't last forever, and the higher court of history has echoed this on numerous occassions.
            William Wallace
            Reply 6 Votes

          • Boost for Microsoft

            I've talked to some Apple lovers I know and they aren't happy with the litiginous side of Apple. Some even said they are considering Win Phones. These brand name conscious people are more likely to go Microsoft than figure out who is who in the Android market.
            mswift@...
            Reply Vote

          • Hypebole?!? You're one to talk

            For instance, not ONCE, in that whole diatribe did you post a SINGLE example to bolster your point. Not ONE example of what Apple "stole".
            .DeusExMachina.
            Reply 1 Vote

          • Apple is getting what they deserve

            They have done nothing but copy other peoples designs, hardware, software and ideas over the last decades. This is really not acceptable. And now they are suing everyone who competes with them.
            Jimster480
            Reply Vote

          • So what you are saying is...

            ...they deserve the 1+ billion dollar award? Being one of the biggest small minded haters here I am shocked you admitted that.
            non-biased
            Reply Vote

          • Odd

            Why are you using such Ludicrous capitalization in your post?
            Apple pays for other companies to manufacture their hardware as I am sure that you know. I'm sure you are capable of searching Foxconn, for one, online to see all of the companies that buy hardware from them. Apple did and does innovate which is how they developed the first iPhone, the iPad and more. Their years of research and development, plus the cost to them counts for something is a fact. They are saying that they spent the money and time creating the iPhone, then others copy it, along with some minor changes in some cases, deserves a licensing fee. It's well known and widely written about that Steve Jobs accomplishments are well known and well published. But you know all of this as it is very easy to research on the web. Anything I say will be a hands down here because that's what all of the cool kids are doing now. Your answer to the problem is that Apple should continue to innovate, so these other companies can rapidly copy, with minor modifications to any device that they develop at little or not cost to them? Why aren't these other companies innovating and developing the next great device which takes years and a lot of money, so that Apple can copy them and release a device, with minor modifications, and no ramifications, at little cost to them? Apple fans are not being alienated by Apple, needless to say.
            donnalb
            Reply Vote

          • Stop taking the narrow view and open your eyes

            Sure, Apple hardware is built with components produced primarily by other companies. First, how is this any different than the vast majority of products in the world, especially electronics consumer or not. Second, many of the components are of Apple's design and built to their spec. It's smart business to contract out work to somebody that specializes in that task versus doing in yourself. Third, what would you have if you collected all those parts in a pile, nothing special. It took Apple to put them all together and create the OS it runs on to produce products that have taken their particular markets by storm.

            As far as the lawsuits go, do you honestly expect us to believe that if you owned patents that your competitors used without licensing to compete against you that you would just let them do it, do nothing about it? If so you are either completely full of it or bound for failure in business. Apple has no problem with having competitors, they just aren't going to let them compete using Apple's own tech that was not licensed to them.
            non-biased
            Reply Vote

          • This is the defintion

            of a lost lawsuit.
            kirovs@...
            Reply Vote

          • And they were asked to apologise publicly...

            or did you forget that from reading it just a second ago? If they did nothing wrong, or didn't lose, then why would they need to apologise. Logic-much?
            12312332123
            Reply 2 Votes

          • And that was addressed by citing the Appeal

            Lack of logic much?
            .DeusExMachina.
            Reply Vote

        • Actually

          That UK judge decision was just too unprofessional. Judges do afford themselves fun like this from time to time, and besides, that's an British judge! :)
          danbi
          Reply 4 Votes

        • So you will be shutting your mouth on most of these discussions now?

          With the verdict in on Apple versus Samsung in Jan Jose I guess based on your post above that you will now keep your mouth shut on most of the topics being litigated since your opinion doesn't trump a troll let alone a "real live judge" or jury?
          non-biased
          Reply Vote
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