Samsung and Apple Battle it out in Patent War
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Rivals Samsung Electronics (NASDAQOTH: SSNLF) and Apple (NASDAQ: AAPL) have long battled it out for tech supremacy, but as the firms continue their patent war, they may only be paving the way for newcomer Google (NASDAQ: GOOG).
After all, each company is in the midst of copyright fights with each other that culminate in a slew of alleged patent infringements. The US International Trade Commission ruled on June 5 that Apple violated a Samsung patent for wireless technology. Since when do geniuses need to copy? The only way the ruling can be lifted is if President Barack Obama vetoes it, or an appeals court blocks it. The patent is related to the 3G wireless technology and the devices' ability to transmit various services concurrently.
The ruling bans many of the older model iPhones and iPads from entering the United States. This affects devices on the AT&T network, including the iPhone 4, iPhone 3GS, iPad 3G, iPad 2 3G and the iPad 3. However, those already owning one of these devices will hold onto theirs, as the ruling only affects products entering the U.S.
Copying Could Be Too Tempting
This tit-for-tat exchange between the companies looks to be the result of each firm attempting to cut corners. It's all too tempting to peak over the "other guy's" shoulder to see the advancements they are making.
Apple won $1 billion from Samsung last summer, when the smartphone giant called the firm a copycat. The lawsuit was filed in 2011 and involves the illegal use of Apple technology. At the time, Apple appealed to the courts to attempt to stop the sale of a myriad of Samsung products throughout the U.S. That never happened, but now the shoe is on the other foot, and Apple is not allowed to import the various gadgets, which are made in China, to the U.S.
Google Is Ready to Attack
As Apple and Samsung continue their patent war, a newcomer on the scene, Google, is set to release its Moto X by October, through newly acquired Motorola. The Google ownership means the Moto X can be sold relatively cheaper than it would without the billions of dollars that come from being backed by Google -- a lower profit margin is acceptable. Affordability could mean the devices would be prime for mass purchase.
Just how cheap the Moto X will be is still speculation, but a device selling cheaper than any other smartphone would increase the odds of the gadget catching on in developing countries. This is a market Apple is rumored to be interested in cracking by developing iPhones made out of cheaper material. Lowering the production costs would allow the company to sell at a lower price -- one that those in developing nations could afford.
A Changing Landscape?
So while Apple and Samsung continue to duke it out, it may be a surprise upset by Google that really makes the biggest impact on the smartphone market. After all, when a company with a market cap of about $292 billion, such as Google, decides to enter the ring, the competition should be scared, because this battle has just gotten started.
Phillip Woolgar has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of 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. Is this post wrong? Click here. Think you can do better? Join us and write your own!