Apple's Victory Over Samsung Marks A New Era For The Smartphone Market
The historical Apple (AAPL) vs. Samsung (SSNLF.PK) verdict came out on Friday.
- (1888PressRelease) August 30, 2012 - The outcome was what the market had expected; however, the swiftness and severity of the decision was quite unexpected. The San Jones jury found Samsung guilty of willful infringement of Apple's designs. The iPhone manufacturer was seeking a settlement of $2.75 billion, claiming that Samsung's profit margins on devices infringed to be 35%. The jury found these claims to be incorrect and awarded a $1.05 billion settlement; which is much closer to the profit margin claims of 12% by Samsung. These damages could triple considering that "willful" infringement was involved.
The Friday verdict will have far reaching international repercussions and will change many market norms; however, for the time being, it mostly affects American consumers and carriers. Therefore, to analyze the overall affect on manufacturers, we should look at international smartphone demand. China and India are currently the largest mobile markets. According to March 2012 figures, approximately 1 billion mobile users are in China, while India is in second place with 0.92 billion users.
The biggest winners in this case are Apple and Microsoft. The biggest loser is Samsung and the American consumer. Samsung products were much better devices and were available at more cost effective rates. In the long run, this decision will increase the focus of companies on R&D and innovation. However, for the time being, it will increase Apple's profit margins.
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