Samsung withdraws countersuit against Apple, consolidates component business
Samsung is dropping a patent infringement suit against Apple in the U.S in order to "streamline" their legal battle, even as the company has announced plans to fold its struggling display business into its chipmaking operations.
Countersuit dropped
A spokesman for the South Korea-based electronics giant told Bloomberg that the decision to withdraw the suit from a U.S. federal court in San Jose was meant "to streamline the legal proceedings."
Samsung had accused Apple of violating patents "related to fundamental innovations that increase mobile device reliability,efficiency, and quality, and improve user interface in mobile handsets and other products."
Nam made it clear that the action wasn't a sign that the company was giving up its fight against Apple. ?Samsung will continue to actively defend and protect our intellectual property,? he said. As recommended by a judge, the company will fold its complaint into a counter-claim in the suit Apple filed against it at the same court in April.
The dispute between Apple and Samsung heated up this week, with both sides moving to increase the pressure on each other. Apple sought to accelerate the case by filing for a preliminary injunction on four of Samsung's products on Friday, while Samsung submitted a complaint with the U.S. International Trade Commission requesting an import ban of Apple's devices.
Samsung also amended its defense against Apple's suit by asserting that its products are merely competing with Apple's, calling the iPhone maker's suit "efforts to avoid such competition." Meanwhile, Apple has strengthened the language in its original complaint, calling Samsung "even bolder" than other competitors in "slavishly" imitating the iPhone and iPad.
Samsung component operations
Faced with the possibility of a second consecutive quarter of losses from its display component business, Samsung has announced plans to combine its component-manufacturing operations, The Wall Street Journal reports. The company's semiconductor and display businesses account for 44 percent of revenue and 70 percent of its profits.
Samsung said in a statement that the merge "is aimed at enhancing cooperation and generating synergy?in technology development, production, procurement and client management." Kwon Oh-hyun, the company's president of its semiconductor operation, will lead the new combined business, with the company's LCD head now serving as an assistant to the CEO.
The company had originally split the semiconductor and display businesses in 2004 during a boom in LCD sales and larger flat screens required technology that diverged from semiconductor operations. However, LCD profits have contracted in recent years, weakening the business.
While the move is largely seen as a financial decision to smooth over the display unit's struggles with the chip operations, the report also speculates that the restructuring could be a preliminary move in spinning off the company's component-manufacturing operations. At issue is the fact that clients of Samsung's component businesses compete with the company's other divisions, which make a wide range of products, including cellphones, TVs, and computers.
Apple's complicated relationship with Samsung serves as a strong example of that fact. Even as the companies are fierce competitors in the smartphone and tablet markets, the iPhone maker is expected to become Samsung's largest component client this year with estimated purchases of $7.8 billion, up from $5.7 billion in orders in 2010.
Recent rumors have suggested that Apple may look to reduce some of its dependence on Samsung's manufacturing operations by moving production of its next-generation "A6" chip away from the company. Taiwan Semiconductor Manufacturing Company will reportedly step in as Apple's new chipmaking partner in 2012.
Apple COO Tim Cook said during a quarterly earnings call in April that Samsung remains a "valuable partner" in supplying component devices, but the company's mobile communication division had crossed the line in copying the iPhone and iPad. "After trying for some time to work out the issue, we decided we needed to rely on the courts," he said.
Countersuit dropped
A spokesman for the South Korea-based electronics giant told Bloomberg that the decision to withdraw the suit from a U.S. federal court in San Jose was meant "to streamline the legal proceedings."
Samsung had accused Apple of violating patents "related to fundamental innovations that increase mobile device reliability,efficiency, and quality, and improve user interface in mobile handsets and other products."
Nam made it clear that the action wasn't a sign that the company was giving up its fight against Apple. ?Samsung will continue to actively defend and protect our intellectual property,? he said. As recommended by a judge, the company will fold its complaint into a counter-claim in the suit Apple filed against it at the same court in April.
The dispute between Apple and Samsung heated up this week, with both sides moving to increase the pressure on each other. Apple sought to accelerate the case by filing for a preliminary injunction on four of Samsung's products on Friday, while Samsung submitted a complaint with the U.S. International Trade Commission requesting an import ban of Apple's devices.
Samsung also amended its defense against Apple's suit by asserting that its products are merely competing with Apple's, calling the iPhone maker's suit "efforts to avoid such competition." Meanwhile, Apple has strengthened the language in its original complaint, calling Samsung "even bolder" than other competitors in "slavishly" imitating the iPhone and iPad.
Samsung component operations
Faced with the possibility of a second consecutive quarter of losses from its display component business, Samsung has announced plans to combine its component-manufacturing operations, The Wall Street Journal reports. The company's semiconductor and display businesses account for 44 percent of revenue and 70 percent of its profits.
Samsung said in a statement that the merge "is aimed at enhancing cooperation and generating synergy?in technology development, production, procurement and client management." Kwon Oh-hyun, the company's president of its semiconductor operation, will lead the new combined business, with the company's LCD head now serving as an assistant to the CEO.
The company had originally split the semiconductor and display businesses in 2004 during a boom in LCD sales and larger flat screens required technology that diverged from semiconductor operations. However, LCD profits have contracted in recent years, weakening the business.
While the move is largely seen as a financial decision to smooth over the display unit's struggles with the chip operations, the report also speculates that the restructuring could be a preliminary move in spinning off the company's component-manufacturing operations. At issue is the fact that clients of Samsung's component businesses compete with the company's other divisions, which make a wide range of products, including cellphones, TVs, and computers.
Apple's complicated relationship with Samsung serves as a strong example of that fact. Even as the companies are fierce competitors in the smartphone and tablet markets, the iPhone maker is expected to become Samsung's largest component client this year with estimated purchases of $7.8 billion, up from $5.7 billion in orders in 2010.
Recent rumors have suggested that Apple may look to reduce some of its dependence on Samsung's manufacturing operations by moving production of its next-generation "A6" chip away from the company. Taiwan Semiconductor Manufacturing Company will reportedly step in as Apple's new chipmaking partner in 2012.
Apple COO Tim Cook said during a quarterly earnings call in April that Samsung remains a "valuable partner" in supplying component devices, but the company's mobile communication division had crossed the line in copying the iPhone and iPad. "After trying for some time to work out the issue, we decided we needed to rely on the courts," he said.
Comments
Apple's investment in Brazil for electronics parts will increase with 3rd parties.
Apple's assembly will expand considerably more in South America and reduce in East Asia.
LG and other third parties who make equivalent chips from Samsung will see increased business, including Micron.
Apple's assembly will expand considerably more in South America and reduce in East Asia.
Yes perhaps to the first, but no to the second. You have to appreciate that Apple is accelerating manufacturing at a pace that is literally without precedent. Apple won't be reducing assembly in asia anytime soon. Most likely the Brazilian assembly will be mostly limited to serving the South American consumer market, supply chains for using it to serve say Europe, would be needlessly longer and more complex.
Still I don't think Apple is ready to part ways with Samsung Semiconductor yet. If anything they need a second manufacture just to keep up with demand. A diverse supplier base is a very good thing.
Samsung is either very confident of winning this lawsuit or they are being suicidal. "That's the Wonder of Samsung"
Still I don't think Apple is ready to part ways with Samsung Semiconductor yet. If anything they need a second manufacture just to keep up with demand. A diverse supplier base is a very good thing.
I think it will mostly depend on processes. If TSMC can deliver 28nm in volume before Samsung then they could win the bulk of the A6. If Intel were serious about being interested in Apple's foundry work they could conceivably offer compelling price/performance for the A7.
But yeh, short of that Apple won't completely abandon Samsung, though that doesn't stop them from exerting pressure.
The patent lawsuits in Korea, Japan and Germany are still in effect.
Samsung is not backing down people.
Samsung originally filed a separate countersuit about two weeks after Apple filed its complaint with the same district court. Yesterday Samsung filed a notice of voluntary dismissal of that separate lawsuit because the judge had suggested that Samsung convert it into counterclaims against Apple's complaint, for the sake of a more efficient process. It's also in Samsung's interest to do so: this way Apple's claims and Samsung's counterclaims will be adjudicated at the same time.
http://fosspatents.blogspot.com/2011...st-apples.html
This brings up an interesting scenario. If the court decides that both of the allegations from either parties claims are correct, would that be mutual annihilation? In other words, would both of the companies products be pulled from the shelves on the market?
If that becomes the case, wouldn't Apple take the bigger hit than Samsung? Apple's main source of revenue is from iPod, iPhone and iPad. Where as Samsung's main source of revenues come from its component business. The deal between Apple and Samsung about component supply has already been established through an up front payment by Apple so that wouldnt hurt Samsung one bit. However, it would hurt Apple quite a lot since they wont be able to sell any of their products to the consumer.
Plus, Samsung's mobile handset business also consists of the "dumb" phones, you know "regular" cellphones ( yeah they do exist). So their mobile division will still be chugging along even after their smartphone department (Android specifically as they have 2 other OS's in their company, even possibly a third) is on a court ordered halt.
This is the reason why companies try to diversify their revenue sources as much as possible for fear of business declining (either through competition or by the courts).
Something to think about I guess.....
This brings up an interesting scenario. If the court decides that both of the allegations from either parties claims are correct, would that be mutual annihilation? In other words, would both of the companies products be pulled from the shelves on the market?
Most of these cases take a lot of time?sometimes years. Appeals will also happen and sales will continue in the meantime. Replacement products are probably already on the drawing board. I'll bet some scam artists are getting ready to tell customers that buying a Samsung is the same as buying an Apple and that both are one and the same.
Let me guess: Samsung is not withdrawing their countersuit against Apple, they are "competing" with Apple.
It's all designed to make Samsung's legal battles "quite smooth", just like their sell-through of Galaxy Tabs...
I'm honestly confused. But I guess it's just business and trying to manage such a corporate behemoth. This is probably only a small part of the picture, Samsung as a whole is a massive operation once you take into account all their non-tech industries as well.
But if anyone can clarify the issue, that would be appreciated.
I think it will mostly depend on processes. If TSMC can deliver 28nm in volume before Samsung then they could win the bulk of the A6. If Intel were serious about being interested in Apple's foundry work they could conceivably offer compelling price/performance for the A7.
But yeh, short of that Apple won't completely abandon Samsung, though that doesn't stop them from exerting pressure.
GlobalFoundries is certified for 28nm.
On the component and brands side, I don't understand why Samsung is struggling. They make arguably some of the best displays in the world for the price points. And samsung supplies displays for so many other brands in all shapes and sizes, from LED-backlit to LCD or AMOLED to whatever.
I'm honestly confused. But I guess it's just business and trying to manage such a corporate behemoth. This is probably only a small part of the picture, Samsung as a whole is a massive operation once you take into account all their non-tech industries as well.
But if anyone can clarify the issue, that would be appreciated.
The panels are mid-tier for 24". They aren't NEC or HP LP2475w quality panels. They don't even stand in the same room as EIZO [most don't], but their Monitor frames [enclosures] are weak, structurally cheap and that glossy black look. Truly cheap.
The iPhone and iPad are convincing people that yes you do get higher quality from Apple. This trickles over to their iMacs, Mac Pros, Macbooks, mac mini, airport units, monitors, keyboards, mice, etc.
Most people after they walk into an Apple store and walk over to a Best Buy laugh and walk around laughing even more at how cheap the stuff is over at Best Buy that isn't Apple designed.
On the component and brands side, I don't understand why Samsung is struggling. They make arguably some of the best displays in the world for the price points. And samsung supplies displays for so many other brands in all shapes and sizes, from LED-backlit to LCD or AMOLED to whatever.
I'm honestly confused. But I guess it's just business and trying to manage such a corporate behemoth. This is probably only a small part of the picture, Samsung as a whole is a massive operation once you take into account all their non-tech industries as well.
But if anyone can clarify the issue, that would be appreciated.
They're putting their amoled screens in their products at a loss. A big loss apparantly. That's why Apple sticks with lcd.
This brings up an interesting scenario. If the court decides that both of the allegations from either parties claims are correct, would that be mutual annihilation? In other words, would both of the companies products be pulled from the shelves on the market?
In principle yes, but in practice that is extraordinarily unlikely, first off remember that the patents that are in play here are very very different. Apple is hitting Samsung primarily with design patents, which means that they're extremely simple. Infringement can be decided by literally looking at the outside of the devices, and invalidating the patents for obviousness or prior art is difficult due to their extreme specificity.
Apple is including a utility patent in the package of 4, but as I've said before I think that's a strategic decision where they're hoping to strengthen that patent by forcing Samsung to license it along with paying damages on the other 3 - ie. Apple doesn't need that patent to win at the ITC.
Samsung's patents are all utility patents where it is far harder to decide if infringement is occuring or if the patent is even valid. This is the same sort of territory S3 are and Nokia were playing on, and we didn't see any injunctions granted immediately in those cases. Nokia particularly had a stronger case but we still saw their suit bounce up and down as patents were removed, appealed, etc.
So in practical terms it's likely that if both Apple and Samsung did win their respective suits Apple would win their's first by a considerable margin and would thus be able to force Samsung to the table - because Samsung would know that Apple could drag out the other lawsuit for months or even years as it fought to invalidate each of Samsung's patents.
Samsung's 4th patent seems particularly weak, since it stipulates that the infringing device have a keypad - which the iPhone clearly does not. The 5th patent stipulates a pointer used on the touchscreen. The first patent is a CDMA patent and even assuming it's valid Apple will argue that they're covered by their supplier, Qualcomm, which has a cross license agreement with Samsung. That kind of thing is enough to render a patents relevance in question, and the ITC aren't going to issue this kind of summary judgement when there is still ambiguity.
Plus, Samsung's mobile handset business also consists of the "dumb" phones, you know "regular" cellphones ( yeah they do exist). So their mobile division will still be chugging along even after their smartphone department (Android specifically as they have 2 other OS's in their company, even possibly a third) is on a court ordered halt.
They don't make any real money on dumbphones, margins there are razor thin, handset makers are effectively in that market just to avoid ceding market share. Bada isn't successful in the US, though it has users in developing nations, WP7 isn't successful anywhere, neither is WebOS. Samsung are dependent on Android - if they lost supply their users would just switch to Moto, HTC and yes iPhone.
If there was a disruption to Apple's supply for a few weeks I suspect most Apple users would just wait, because Apple has such tremendous brand loyalty. Longer than that could cause Apple issues though.
But as I've already pointed out, it's extraordinarily unlikely that Samsung's case would be decided as fast as Apple's.
GlobalFoundries is certified for 28nm.
Globalfoundries is not focused on lower power applications as I understand it.
Why the heck did they put out multiple countersues in, not one but also multiple cities in the first place. More like trying to hide the fact that they're wrong by being the loudest, that's why.
My thoughts exactly.
"OH BUGGER! They've found us out! Quick, distract them with the megaphones!"