Samsung rises amid deepening patent dispute

By Kim Yoo-chul

The headquarters of Samsung Electronics in Gangnam, southern Seoul

The ongoing patent dispute between Samsung Electronics and Apple has incurred a huge amount of legal and marketing expenses for both companies.

But so far it seems that Samsung is more likely to benefit, at least outside of the courts.

In the midst of the deepening patent war, Samsung has seen its brand values improve while Apple’s has remained the same. In terms of smartphone market share and share price, the Korean technology giant has overwhelmed its U.S. rival.

The market gap with Apple in the race for smartphones has further widened and Samsung is even cutting off its parts supplies to Apple as part of its strategy to shift a previous supplier-buyer partnership towards a business partnership in a real sense.

The Korean company was ninth in terms of brand value, according to a recent study by InterBrand, the world’s leading brand consultancy.

One interesting point is that Samsung’s top management and even low-ranking employees agreed to extend the lead over Apple, according to Samsung officials.

``The fight with Apple is a very good excuse for Samsung to shorten the launch timing of product launches, to encourage employees and to invest more in software, which is still our major weakness. But we do think we have been managing well since Apple initiated the war last year,’’ said a Samsung executive by telephone.

``As the fight goes on, we have lost some. But we gained more. Even people in rural areas in our key markets such as China and the United Sates know who we are and what we make. This is a great achievement,’’ said the executive.

Impressed by the trend, the company’s mobile chief Shin Jong-kyun has turned talkative and hasn’t hesitated to give comments to sensitive questions by local reporters who cover the firm.

Shin told reporters last week that his division was positive about selling 40 million Galaxy SIII smartphones by the end of this year.

And Samsung is ready to release the upgraded Galaxy SIV in February, using full high-definition (HD) and organic light-emitting diode (OLED) technology.

The executive surprised reporters by directly hitting out at Apple. ``The truth never lies. The iPhone couldn’t exist without Samsung’s wireless patents. You already know that Samsung is strong in wireless patents,’’ Shin said. Just a year ago, he rarely spoke out on critical matters.

``Recent aggressive remarks by the mobile chief reflect his confidence to manage the current fight with Apple,’’ said another Samsung official.

The company targets to sell 350 million smartphones next year, while it plans to sell 32 million tablet computers, an increase of 50 percent and 129 percent from this year respectively.

In a separate interview, Samsung Electronics Chief Marketing Officer Sue Shim said the firm is aiming to achieve top-five brand value by 2020. ``We can’t but admit that Apple helps.’’

Apple is Samsung’s top client. Last year, the American company bought $8 billion worth of Samsung flat-screens, chips and application processors.

The iPhone maker is trying to cut its heavy reliance on Samsung but, the attempts have not been successful thus far.

``Samsung is a highly innovative company and consumers love Samsung products,’’ said Jorge L. Contreras, co-chairman of the National Conference of Lawyers and Scientists, in an interview with The Korea Times, Thursday.

On a related note, he said Apple doesn’t intend to use its patents to attempt to monopolize the smartphone market following a settlement with Taiwan’s HTC, which he believes is good news for Samsung.