Samsung Stand Their Ground as Apple Threatens with Product Ban
Samsung is in one of its hardest periods. The company was accused of violating Apple’s patents and that resulted in an enormous loss for the company amounting to nearly $12 billion. But the worst news is that that can lead to the ban on sales for some of Samsung’s most popular devices. These facts do not point that prices of Samsung smartphones will cheapen in the long run.
In August, Samsung Electronics Co. was found to have violated 6 patents. Now the company has to pay $1 billion in damages to its biggest competitor. Some analysts believe that because of that Samsung may lose its influence on the smartphone market. As a result, Google and Nokia may see a significant increase in sales of smartphones in the coming months. What consumers think is yet to be seen, but share prices do not affect quality of electronic devices.
Standing Their Ground
In fact, Samsung is already suffering the consequences of the scandal. Prices of its stocks fell dramatically. Apple, on the other hand, is enjoying a massive climb. But retail prices of Samsung’s smartphones remain unchanged in retail stores worldwide.
Recently, Samsung released a memo to the press and its shareholders. In it the company’s board expresses hope that their share holders will continue to offer support and customers will choose “innovation over litigation”. Furthermore, spokespeople to the company clearly stated that Samsung will ask for the verdict to be overturned and maybe even appeal the case. However, an eventual verdict would mean a delay in releasing the company’s new products at least in some parts of the world.
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AliExpress by Alibaba.com ” border=”0″/>North America is a key region for Samsung. Americans seem to value Samsung’s products highly since the company generated 16 percent of its revenue there. However, expansion in the emerging markets may successfully substitute the revenues elsewhere. Because of the recent verdict and the possible delay in product releases, Samsung may have to come up quickly with new devices worthy enough to compete with Apple’s next generation iPhone and iPad.
The hearing for the next trial is set to take place on September 20. At the time, Apple are going to specify which devices exactly violate their patents. There is a nearly 70% chance that Samsung’s problematic devices will be banned in the United States.
However, Samsung seem to be positive about the trial’s outcome. A spokesperson to the company informed that Samsung is going to release its new products as planned. Among these new products is Galaxy Note’s new version, which sold over 10 million units in less than a year. In order to escape the ban, the new Galaxy S III may undergo modifications. These modifications most probably will enhance the device further, but not otherwise. From a price point of view, it is most likely to justify the numbers.
Samsung, which is the largest maker of flat-screen panels, televisions and computer-memory chips, also plans to expand further this year and to increase its manufacturing capacity. And according to experts, the company has enough money to do that and to change some of their products designs.
Another One Bites the Dust
Samsung is not the only one accused of patent violation. Apple has also aimed their gun at HTC Corp, which is the fourth largest corporation of that kind. That resulted in 3.2% drop for HTC. Some of the patents that are said to be violated by Samsung, also threated a number of HTC devices. Currently, from HTC are denying any comment.
The interesting thing about this drama is despite all the disputes Apple is Samsung’s largest client. About 9% of Samsung revenue comes from Apple.
According to experts, it will be long fight, because it will take time for sales to be banned. Even if that happens, Samsung won’t back down and they would most likely appeal. All these circumstance could make Samsung unstable, and investors would not like that.
However, time is a crucial element in this battle as new generation devices are being released much more often then in the past.