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.
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.