Apple and Samsung battle escalates: Great opportunity for tech suppliers to win Apple business
Samsung is suing to stop the sale of Apple’s products, products they are core suppliers for. This seems like suicide for me. I question Samsung’s brinkmanship strategy.
Apple and Samsung are engaging in an increasingly hostile legal battle. The conflict stems from Samsung generously borrowing Apple’s iPhone design (while at the same time being a principal supplier of components for the iPhone).
This seems like a great opportunity for outside suppliers to win more business from Apple. The troubles stem from Apple’s claims about Samsung copying from Apple’s products. Samsung seems to be imitating Apple products for mobile devices (which is fairly easy considering the help produce key components for Apple). In retaliation, Samsung is bringing forth its own lawsuits against Apple. I’m not sure if it’s worth it for Samsung though. Even if they win the legal battle, they still are jeopardizing their relationship with a key client.
From a strategic perspective:
- There are multiple mobile device manufacturers creating Android based products. Can Samsung ever truly get a leading market-share in this space? Because if they don’t, they just lost out in the mobile market on two fronts.
- Apple seems to be gaining steam since it went multi-carrier.
The Apple business represents a profitable and reliable stream of revenue and profits given that Apple customers are fiercely loyal. On the other hand, Android based phones are a dime a dozen on a relative basis. The possibility of losing Apple’s business for the sake of entering a competitive Android based mobile market seems like an incorrect strategic decision. It’s the equivalent of Intel developing their own operating system to compete with Windows back in the 90s at the risk of getting blackballed out of the Wintel alliance.
Opportunity for Component Manufacturers
For component manufacturers, this seems like a great opportunity to win business from Apple. They can make the claim that they are happy to work with Apple and won’t create a competing product that borrows extensively from Apple.
The article I am referencing is below from the WSJ:
Samsung Electronics Co. said on Thursday that it expanded its legal tussle with Apple Inc. by filing a complaint with the International Trade Commission seeking to stop the sale of key Apple products in the U.S.
Samsung also said it filed another lawsuit against Apple in a Delaware district court in the U.S., alleging violations by Apple of patents Samsung holds on telecommunications technology, as well as lawsuits in the U.K and Italy.
The two steps are part of a broader strategy by Samsung to counter a product-copying lawsuit that Apple filed against it two months ago.
In the original case, legal analysts say Apple is moving toward seeking a preliminary injunction that could force Samsung to stop selling its flagship smartphone, called Galaxy S, in the U.S., its largest market. With the ITC complaint, Samsung asked for a ban on the import of Apple’s popular iPods, iPhones and iPads to the U.S.
The fight is one of many that have emerged over the past year in the smartphone and tablet computer markets, new segments of the technology industry where profit margins are relatively high and market leadership is unsettled.
But it has taken unusual prominence because Apple and Samsung, while competing in consumer products, have a relationship in which Apple is the biggest customer of Samsung’s component manufacturing businesses, which make logic chips, memory chips and liquid crystal displays for gadgets of all types.
Since the first suit was filed, the legal approaches of the two companies have exposed their different basic competencies and advantages in the marketplace. Apple is asserting the primacy of its ability to design distinctive products, a skill that enables it to charge premium prices and reap larger profit margins. Samsung is asserting that its manufacturing prowess is equally, or even more, valuable.
The fight has prompted speculation throughout the electronics industry that Apple might try to end its supplier relationship with Samsung, a move that would prove costly to Samsung’s chip business, which has been yielding the company’s highest profits over the past few years.
Apple executives have said they expect the relationship to continue. Samsung has declined to comment on the relationship, but company chairman Lee Kun-hee in late April indirectly criticized Apple’s lawsuit as an attempt to restrain Samsung. “When a nail sticks out, [people] try to pound it down,” Mr. Lee told local reporters at the time.
Samsung responded to the initial Apple lawsuit with countersuits in the U.S., South Korea, Japan and Germany that claimed that Apple violated technology patents it holds.
After all that, Apple last week filed a second suit against Samsung, in Samsung’s home country of South Korea, that repeated some of the product-copying claims made in the original suit in the U.S. and added claims that Samsung was violating some technology patents that Apple holds.
Samsung extended its technology patent suit to the U.K. and Italy on Wednesday and said it may file additional patent suits in Europe.
Samsung’s new complaints to the ITC and in a Delaware court allege different violations of Samsung patents by Apple than Samsung has made in its earlier suits, a company spokesman in Seoul said.
In announcing the latest moves, Samsung repeated its earlier statements that it would “actively defend our intellectual property.”
An Apple spokesman declined to comment.
Read more: http://online.wsj.com/article/SB10001424052702304584004576416653834271060.html#ixzz1QjcgCFXh