When Samsung Loses who Wins?
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Apple (NASDAQ: AAPL) scored a huge win against rival Samsung in its ongoing patent battles. In California the jury found Samsung guilty of willfully infringing on almost all of the contested patents in the suit while finding Apple innocent of any infringement. Apple added to its cash hoard with a $1.05 billion dollar award in the case which the judge can increase up to 300% because Samsung was found to have willfully infringed on the patents. For the broader market this puts a serious dent in Android based smart phones. Many of the functions found stock on handset makers Android based phones were found to have had infringed on patents in the lawsuit. What will follow if Samsung can’t contest the verdict will be obvious sales bans on the devices which have been found to infringe Apple patents. For other manufacturers they will have to look at the handsets they have in production and in the market as they may have to pull them off the shelves. There are very few companies in the world that can go head to head in a patent lawsuit with Apple and still be in business when it’s over.
A bump in the road
This means that many Android based smart phones could not only see a reduction in offerings but also a real competitive loss in functionality. When one loses usually another gains and here there are several companies that could potentially gain from this lawsuit if it is held up in appeal court and sales bans go into effect. Google (NASDAQ: GOOG) and Apple have been firing small shots back and forth at each other and though Google only provides the OS for the Android based smart phones the more prevalent that OS is, the more devices are geared to find things using Google’s search technology. This being said Google’s purchase of Motorola and their patent portfolio is looking better now as handsets released by Google directly through Motorola will be able to utilize their own technology and be much less worried of a major lawsuit.
A Forgotten player
No one wants to hear this but the lawsuit could also be good for another tech company with a huge patent portfolio and a new line of handsets on the horizon. RIM (NASDAQ: BBRY) has lost massive market share to not only Apple but Samsung, HTC, and other Android based handset makers. This lawsuit and any sales bans that go into effect would only help to highlight the RIM offerings if they are up to the test. Everything being said and released by RIM indicates their phones will be at least comparable to what is out right now. If a sale ban goes into effect in the near future none of the companies affected will have enough time to release anything meaningful for the holiday season, and as RIM had indicated they will be releasing BB10 in the first quarter of 2013, there would be little out in the market besides the iPhone when BB10 hit the shelves.
An uncertain Future
Obviously much could happen from now until then and Samsung could still win in appeals court. If you were following the case the evidence though points to Samsung being guilty, and a jury taking only 21 hours to find a verdict would indicate there was little uncertainty in the deliberations by the jury. If the court verdict stands up the next step will be sales bans on infringing products from Samsung and other handset makers worried about literally being put out of business by a major lawsuit from Apple. This could leave the hole RIM desperately needs to get back into the game. The last company that could benefit greatly from this verdict is Apple’s old rival/friend Microsoft (NASDAQ: MSFT) as they release the windows 8 phone. Microsoft could not only capitalize on the timing of their release of the phone but as their operating system will be running windows, one could see a resurgence in a Microsoft OS that provided more patent protection then the Android based OS. Whatever happens it seems this verdict has opened up the market either to further domination by Apple or for a couple other big players to get back into the game.
We will have to see what happens moving forward with the verdict and its effect on the market. If there are sales injunctions and Samsung handsets are prevented from being sold it will directly benefit Microsoft and RIM. RIM is in dire need of a break and this verdict, if it results in sales injunctions, could allow RIM the door to get back into the market. It could also allow Microsoft to enter a handset market that would be seriously depleted of Android based competitors. We will wait to see what is the end result, but one thing is clear if it stands Apple will not be the only winner in this case.
mooseelz owns shares of Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. Motley Fool newsletter services recommend Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
