Apple and Samsung Look for ‘Common Ground’ to End Patent War
Apple (NASDAQ:AAPL) and Samsung (SSNLF.PK) may be nearing a ceasefire after several false starts to peace talks in their long-running patent war. Apple Insider reports that an unnamed “industry official” told the Korea Times the two companies are “trimming down the number of disputed issues” and looking for common ground and resolution of their long legal battle. The official told the Korea Times that “it’s too early to say that the ongoing working-level talks will produce an immediate breakthrough, but we are more practical about trying to find a solution.”
Apple Insider also reported that the companies have moved to drop all cross-appeals related to last year’s ruling that Samsung infringed on two of Apple’s patents related to a touchscreen interface and headset plug detection technology. In that ruling, Apple won import bans against some Samsung products. The bans remain in effect even though Samsung no longer manufactures or ships the affected products, and its newer products feature workarounds and don’t infringe on Apple’s patents. Additionally, a patent-infringement lawsuit in 2012 awarded Apple almost $1 billion at the time. However, a damages retrial last year brought that amount down to $290 million. A second trial concluded last month found both companies guilty of copying each other’s features and infringing on each other’s patents. However, Samsung was ordered to pay $119.6 million, while Apple was ordered to pay just $158,400. Samsung has since filed an appeal.
Apple has continued to pursue Samsung in court, and the motivation to end the patent war now most likely stems from Apple’s desire to retain Samsung as a supplier for displays and processors. Last month, CNET reported that Samsung was the biggest supplier of iPad displays in the first quarter of 2014, shipping displays that Apple uses in its iPad Air and iPad with Retina display. And according to rumors reported by Apple Insider, Apple could be considering Samsung’s OLED technology for wearable devices like the iWatch it’s eventually expected to launch.
Apple recently called a truce in its patent wars with Google (NASDAQ:GOOG)(NASDAQ:GOOGL). Time reported in May that the two companies signed an agreement to settle all outstanding patent litigation between them and interpreted the settlement as a sign that the “smartphone patent wars” were de-escalating in the tech world. Apple’s iOS and Google’s Android compete as the top two mobile operating systems in the world, and it’s possible that Apple hoped that litigation against Samsung, whose products run on Google’s Android, would help it in the fight for operating system dominance.
Just as Apple and Google produce the top mobile operating systems, Apple and Samsung are the top suppliers of smartphones globally. However, each company saw its global market share drop slightly in the first quarter of 2014, as reported by TechCrunch. Samsung’s competition is Apple at the high end of the market and Chinese brands like Huawei at the low end; its global market share dropped to 31 percent in the first quarter of 2014, down from 32 percent last year.
Apple’s drop in market share, from 50 percent last year to 47 percent in the first quarter of this year, was attributed to the lack of a budget iPhone model for emerging markets like Latin America. And both Apple and Samsung are in danger of losing market share to manufacturers like Huawei and Lenovo, both of which are expected to continue to increase their global market share.
Perhaps it’s in the spirit of that knowledge that Apple and Samsung are now interested in stopping legal expenditures to get back to the business of making smartphones and other products — meaning Apple will have to fight Android in the market, rather than the courtroom.