Samsung, Apple may make up
Top executives of Samsung Electronics and Apple will soon meet to seek a compromise on the patent war that has lasted more than a year.
“Samsung can confirm that our CEO Choi Gee-sung will meet Apple CEO Tim Cook, though the exact time and place haven’t been decided yet,” said a Samsung spokesman, Wednesday.
The Cupertino, California-based Apple also admitted that its chief executive Cook, who replaced the late Steve Jobs in the top job, will represent his firm in the settlement talks with Apple’s general counsel.
The meeting comes after the two electronics giants reached a consensus on settlement talks via alternative dispute resolution (ADR) efforts. That means both had to be fully cooperative, increasing the possibility of concluding the issue, according to legal experts based in Seoul.
Despite the admittance of the meeting, Samsung is still saying no imminent peace treaty will come in the foreseeable future because the meeting comes after an order from a court in the United States.
Judge Lucy Koh, who is presiding over the case in the U.S. District Court for the Northern District of California said in a filing that Samsung and Apple agreed to participate in a “magistrate judge settlement conference,” with the hopes of reaching a settlement within 90 days.
“Tough negotiations are expected before a final settlement. But Choi knows Cook very well from talks on management styles. A result is possible considering the Samsung CEO’s straightforwardness,” said a high-ranking executive by telephone, asking not to be identified.
The companies are battling over patents. On the one side is the maker of such renowned products as the Mac computer, iPod, iPad and iPhone, and on the other, the prolific maker of semiconductors, mobile phones and televisions.
The pair has a long history of global patent litigation. Samsung has increased its budget for the fight against Apple to $260 million this year from $200 million in 2011.
The case dates back to April last year when Apple sued Samsung for copying the look and feel of its iPhone and iPad in its flagship Galaxy S line. Samsung countersued and the fight has expanded to 10 nations.
Samsung doesn’t want peace treaty
Samsung may not be happy to settle the patent dispute as the ongoing fight has helped boost its product image and global brand awareness.
It was late entering the smartphone race but the company did hit the jackpot with its Galaxy S range. Last year, it became the world’s biggest maker of smartphones.
Samsung’s brand value increased by 20 percent over the course of 2011, the biggest jump in a year, and it is now valued at $23.4 billion, according to data from Interbrand’s Best Global Brands 2011 report.
Despite the ongoing battle, Apple is going to buy some $11 billion worth of Samsung LCDs and memory chips for use in its i-branded devices this year, up from $7.8 billion worth of components it bought a year ago, making it the firm’s biggest customer.
“Apple is a good partner for Samsung in raising our revenue, to develop more advanced smartphones and tablets and even to realign our business strategies. If the fight continues, then it’s a scenario that probably Samsung wants,” said one official requesting anonymity.
“The $260 million budget for the Apple fight is a small sum for Samsung considering what we have earned during the dispute. General consumers now know what Samsung is and they’ve begun acknowledging our products as being of the same level to compete with Apple’s,” he said.
During the legal battle, Samsung promoted Kwon Oh-hyun to vice president of Samsung Electronics to handle its parts business such as LCDs and memory chips, while current CEO Choi is handling its business for finished goods.
Samsung Electronics guarantees on-time delivery, product commitment and better pricing to its customers such as Apple. It is supplying its system memory chip the A5X for Apple’s new iPad from its plant in Austin, Texas.
Samsung also picked Xian, China, for its first overseas NAND flash memory chip plant in an attempt to effectively ship more premium chips to Apple. Apple is bracing for China to become its single biggest market.
Because of its involvement in building technology standards, Samsung’s patents are expected to be licensed in a fair, reasonable and non-discriminatory way, also known as FRAND. Apple claims that Samsung hasn’t followed those commitments, and asked European anti-trust authorities to launch an investigation into the latter’s patent-licensing practices.
So far, Apple has won injunctions against the Korean company’s Galaxy-branded tablets in Germany and Australia, however, Samsung was eventually able to overcome them with more appeals and design updates, according to Samsung officials.
Samsung’s upcoming tablet, the Galaxy Tab 2, — will incorporate the changes to avoid other injunctions.