Samsung witness says Apple's damages closer to $519 million, not $2.5 billion - Page 2

There's more to it than that. Apple's supply chain is extraordinarily efficient, keeping costs low.

In addition, Apple releases new models once a year and then sells tens of millions. Even Samsung's best-selling model doesn't have the volume of the iPhone and when you add in all their other dozens of models, the average production run is even lower. That costs money.

Apple's inventory management is superb - with only a few days' inventory. Samsung's presumably greater inventory (since Apple has been widely reported as having the greatest inventory turns in the industry) costs money not only in terms of carrying cost, but also storage and waste (some of those will eventually not be sold or sold at reduced price).

Working the other direction is the screen. Apple's screen is considerably better and probably costs more. OTOH, Apple doesn't yet have LTE chips in their phone and some Samsung models do.

All of those things are reasons why a simple back-of-the-envelope calculation is meaningless. It really requires a detailed evaluation.

So Samsung is now saying they should only be liable for $519 million and Apple should pay $422 million leaving them just $97 million down.

The standard 'let's just call it even' tactic. No way Samsung, you owe $2.5 billion and Apples owes you $0.

Not quite true.

It is pretty widely recognized that Apple may owe Samsung some money for licensing of the FRAND patents. They can reduce the amount owed by arguing patent exhaustion, but there's very little doubt that Apple will owe SOMETHING for the FRAND patents - but only a fraction of what Samsung is asking. I would guess that it's more along the lines of perhaps tens of millions of dollars that can be subtracted from the $2.5 B penalty (possible tripled if the jury believes that the infringement was willful - which seems quite plausible).

Marvin you allow your imagination to run rampant at times. What I've mentioned before is that these aren't emotionally governed issues, and the full numbers are sum totals of estimates. They aren't valid unless the math behind them can be backed up, meaning that each of these patent claims on either side has been presented as a unique claim in itself contributing to a total. The lost sales estimate is another point which can be argued. I don't get how you come to your conclusions at times.

 

Imagination, nothing. This is what they owe.

This is the problem. Neither of you has any math. You're just looking for something that sounds good.

 

Oh, so you don't disagree that they do owe more, just with our numbers (which, admittedly, I'm pulling out of thin air)?

I'm really more neutral than you seem to think. I'm much more interested is in Apple's activities than Samsung's, yet I'm not emotionally tied to the brand. I don't claim to have read every bit of case material. There's really no reason to read into my words for hidden sub-context. On whatever allegations stick, they'll see a specific amount pending appeals assuming there is no settlement. If a patent is considered invalid on either side, it won't be considered in such an amount. This will likely wrap up much faster if it goes to settlement. Otherwise you're likely to see appeals, especially if the jury sides with Apple on every matter, and the calculated damages are anything approaching Apple's requested total.

 

… I'm just curious on which side of the fence you fall about the amount of damages. Nothing more.

 I doubt you'll be pleased by the end result of this. If you look at how many claims Apple made just seeing what would stick, it's unlikely that the end figure will resemble what they requested assuming they win both the trial and resulting appeals process. We will see. It also remains to be seen what happens with samsung's counter claims. Remember there are still other legal battles between the two outside the US.

Edited by hmm - 8/17/12 at 6:23pm

$2B is a big ouch for Samsung, but affordable. $2B means nothing to Apple. For both sides, it's about principles and face.