Dear Audience, it was Samsung’s nightmare scenario. At the end of August, a court in San Jose, California fined the Korean company USD 1.05 billion for violations of Apple’s patents and banned it from selling eight of its smart- phones in the United States. Samsung Electronics chairman Lee Kun-hee described the judgment as “the worst possible outcome.” It was the latest milestone in a three-year lawsuit spanning several continents, with Apple accusing Samsung of copying functions and design features of the iPad and iPhone. Samsung denies this, claiming that Apple,based inCupertino, California, is itself guilty of patent infringements.
The result may be less clear cut in Countries outside the US where Samsung is winning the battle. But with the case set to drag on for years, it faces huge damage – not least to its brand, named by the Interbrand consultancy as one of the world’s twenty most valuable.
The innovation accelerator | Strategic Management
Not even Apple disputes that Samsung is one of the most innovative companies on the planet. The two are competitors and partners: Samsung has been selling technology to Apple for years, including the iPhone 4’s flash memory, DRAM chip, and applications processor, and market research company iSupply says that bought-in parts account for 26 percent of total component cost. Apple’s iPad, too, is heavily reliant on Samsung technology. Apple announced in early September that it would be scaling down the relationship, but neither side can afford to end it: they are simply too dependent on each other. The US company knows that reliable suppliers are essential if it is to meet high levels of demand for new products …