Apple patent win May Change Life

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Apple patent win may slow Google


WASHINGTON: Apple's decisive victory in a landmark US patent case against Samsung could reshape the hot sector for mobile devices and slow the momentum of Google and its Android system, analysts say.

Apple won more than $1 billion in the case Friday, after a California jury found the South Korean electronics giant infringed on dozens of patents held by the iPhone and iPad maker.

Although Google was not a party in the case, it makes the Android operating system which was central to the case -- a system which Apple's late co-founder Steve Jobs called a "stolen" product.

Apple has been battling as Samsung and other manufacturers of the free Android system eat away at its market share in the sizzling market for smartphones and tablet computers.

"I think this will force a reset on Android products as they are reengineered to get around Apple's patents," said Rob Enderle, a technology analyst and consultant with the Enderle Group.

But Enderle said other companies may benefit from the decision, including Microsoft, which has been lagging in the mobile sector, and Blackberry maker Research in Motion, which has been hit hardest by the rise of Android devices.

The court ruling, said Enderle, "should provide a stronger opportunity for both of Microsoft's new platforms -- Windows 8 and Windows Phone 8 -- because they come with indemnification against Apple, suddenly making them far safer and possibly a faster way to get product to market."

The decision also "will make RIM far more attractive as an acquisition because RIM's patents are thought to be strong enough to hold off Apple," Enderle said.

"Both Samsung and Google may make a play for the company, and both Microsoft and Apple may move to block them."

In recent months, Android devices have grabbed more than 50 percent of the US smartphone market to around 30 percent for Apple, while RIM's shares have slid to around 12 percent.

The patents at play include software such as the "bounceback" feature for smartphone users when scrolling and pinch-zooming, which are featured on Android devices.

Florian Mueller, a consultant who follows patent and copyright issues, said Friday's court ruling was "a huge breakthrough."

"The jury essentially concluded that Samsung is a reckless copycat and, since some of the infringement is Google's responsibility, basically agreed with Steve Jobs's claim that Android is a stolen product," he wrote on his blog.

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Apple patent win may delay Samsung launches



Apple Inc won more than $1 billion after a jury found Samsung Electronics Co infringed six of seven patents for its mobile devices in a verdict that may lead to a ban on US sales of handheld electronics a judge deems to violate Apple's rights.

Apple won less than half of what it sought in damages in the first lawsuit to go before a US jury in the fight to dominate the global smartphone market, though US District Judge Lucy Koh may later triple the damages against Samsung under federal law. Samsung avoided a finding of damages for antitrust law violations or breach of contract.

Samsung may need to delay introducing new mobile devices so it can make design changes.

The companies return to court next month for a hearing on Apple's request for a permanent ban on devices including Samsung's Galaxy Tab 10.1. Samsung vaulted to the top of a global smartphone market valued at $219 billion by Bloomberg Industries by introducing a variety of Galaxy models using Google Inc's Android software and gaining share over Apple's more-limited product range. The Suwon, South Korea-based company may have to rush to change products under development, leading to delays as it seeks to widen its lead.

Samsung has gotten around other sales bans by modifying some features of its products. The company last year changed the frame of a Galaxy tab model and the location of speakers after Apple won an injunction banning its sales in Germany.

The global lineup for the rest of this year includes the next version of the Galaxy Note, which sold more than 10 million units in less than a year. The company began selling a tablet edition of the Note this month, following the May release of the Galaxy S III, the newest version in its bestselling smartphone series. Samsung — the largest maker of computer-memory chips, flat-screen panels and TVs — plans to spend $22 billion this year in capital expenditure to boost manufacturing capacity.

The verdict may affect other makers of Android-based devices. Apple has sued other smartphone makers, including HTC Corp, the world's fourth-largest smartphone maker that generated $15.8 billion in revenue last year mostly from selling phones such as Desire and Sensation.

Samsung will ask the judge to overturn the verdict and, if she doesn't, will appeal the case, Mira Jang, a spokeswoman for Samsung, said in an e-mail. "A final decision would've been less burdensome," Heo Pil Seok, chief executive officer at Seoul-based Midas International Asset Management, which oversees $5 billion, said.


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Samsung loses $12 bn in stock market after Apple's win


SEOUL: Samsung Electronics' shares tumbled around 7 percent on Monday, wiping $12 billion off the South Korean giant's market value, as a sweeping victory for Apple in a US patent lawsuit raised concerns about its smartphone business - its biggest cash cow.

Samsung, which says it will contest the verdict, was ordered to pay $1.05 billion in damages after a California jury found it had copied critical features of the hugely popular iPhone and iPad and could face an outright sales ban on key products.

"There are still too many variables including the final ruling to come at least a month from the recent verdict, and whether there will be a sales ban on Samsung's main sellers such as the Galaxy S III," said a fund manager at a Korean asset management company that was one of the biggest institutional holders of Samsung's stock as of end-March.

Shares in Samsung - the world's biggest technology firm by revenue - tumbled as much as 7.7 percent, its biggest daily percentage drop in nearly four years, to 1.177 million Korean won ($1,000), versus a 0.2 percent drop in the broader market.

Trading volume was heavy, more than doubling last week's daily average by early Monday trade.

In the most closely watched patent trial in years, the jury at a federal court in San Jose, California, just miles from Apple's headquarters, found that Samsung infringed on six of seven Apple patents.

The verdict, which surprised many analysts with its speed - coming after less than three days of deliberations - and the extent of Apple's victory, will likely solidify the US firm's dominance of the exploding mobile computing market.

Apple's triumph was also seen as a blow to Google, whose Android software powers the Samsung products that were found to infringe on Apple patents.

Analysts estimate Samsung's earnings will be reduced by 4 percent this year due to increased patent-related provisioning.

"Samsung should be OK - it means a 4-5 percent hit to the bottom line," said a Hong Kong-based hedge fund manager who declined to be identified.

"Both companies are in the midst of a squabble but I don't think it's a structural negative for Samsung. At the end of the day, as Forbes reported recently, Samsung has 65,000 patents versus 9,000 for Apple. Furthermore, Apple relies on Samsung for the processing brains of their phones. I sold Samsung four months ago but am watching the stock closely now."

The court case had weighed on Samsung's stock in the week leading up to Friday's verdict, but even after Monday's slide it remains up around 75 percent over the last 12 months, during which time galloping smartphone sales have powered record profits.

Eyes on Galaxy S III

Apple plans to file for a sales injunction against Samsung, its lawyers said, and the judge in the case set a hearing date for September 20. Samsung, in turn, said the verdict "is not the final word in this case."

Top executives at Samsung, led by vice chairman Choi Gee-sung and head of its mobile division JK Shin, held an emergency meeting on Sunday.

The biggest concern for Samsung remains whether its latest flagship product the Galaxy S III, which was not included in the case, will also be targeted by Apple. The model is Samsung's best selling smartphone, with sales topping 10 million since its late May debut.

But Samsung's skill as a "fast executioner" - quick to match others' innovations - would likely mean tweaked, non-patent infringing devices would be on the market soon after any ban came into place, analysts said.

"The ruling is a costly lesson for Samsung - but also an opportunity for a true alternative to Apple's well-known hardware with more innovative thinking and imaginative products ahead," Morgan Stanley analysts said in a note.

"There are more ways to build a touch screen smartphone and thanks to its fast execution capability, Samsung could quickly work around design changes, upgrading models and introducing new technology such as flexible displays, Galaxy S III and Galaxy Note to differentiate its devices from Apple."

Samsung was disappointed by the verdict and plans to keep up the legal fight to have its claims accepted, according to an internal memo sent to its employees and released to the media.

"We've sought to settle this through negotiations, as Apple is our customer but had no choice but to counter sue," the memo said. "History has shown there has yet to be a company that has won the hearts and minds of consumers and achieved continuous growth when its primary means to competition has been the outright abuse of patent law, not the pursuit of innovation."

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