Is Samsung offering olive branch to Apple?

Employees of Samsung Electronics in the United Kingdom pose for a photo after its Galaxy S2 won the “Mobile Choice Consumer Award 2011” by Mobile Choice, a U.K. IT magazine, at the awarding ceremony in London, Friday. It was chosen as the phone of the year, and Samsung Electronics was selected as the manufacturer of the year. / Courtesy of Samsung Electronics

Samsung delays new phone launch, though vows legal fight

By Kim Yoo-chul

Expectations have arisen that Samsung Electronics might offer an olive branch to Apple after the Korean firm officially announced it was postponing the release of a new smartphone that uses the Android operating system (OS).

Samsung said the decision to delay the event was due to its sincere tribute to the death of Apple co-founder Steve Jobs.

The ``very rare decision’’ by Samsung, which company officials say is a ``goodwill gesture,’’ has raised speculation by industry executives and officials in Korea that Samsung has it in mind to end the ongoing legal disputes.

But Samsung officials told The Korea Times that the company is approaching the matter ``separately,’’ and said Samsung doesn’t have any imminent plans to resolve the legal tussle.

``We’ve acknowledged such speculation, however, that’s gone too far. Samsung is in talks with Google to fix new data for the new smartphone,’’ said a high-ranking Samsung executive, Tuesday.

Representatives of Google’s Korean office declined to confirm that the two companies were in the process of setting a new release date.

The ``Mobile Unpack’’ will be held in San Diego. The event is important for Samsung, which has seen a drastic increase in its smartphone shares internationally.

The Google-Samsung event is the first to exhibit the ``Ice Cream Sandwich OS,’’ allowing third-party developers to create applications that could be fitted for both smartphones and tablet computers.

``Again, the delay doesn’t necessarily mean Samsung is mulling the possibility to make a Samsung-initiated breakthrough in the deepening patent row,’’ added the Samsung executive.

Samsung has admitted it appealed a court ruling in the United Kingdom after Apple sued Samsung over design-related patent infringements.

Samsung officials said the latest action by Samsung is another reflection of its hard-line stance against Apple.

In line with such active strategies in dealing with legal issues, Samsung Electronics brought in Ji Jae-wan, a veteran legal executive from Samsung SDI, the solar-cell affiliate of Samsung Group.

Ji is fluent in English and highly-experienced in cross-licensing issues.

``It’s true that Ji joined Samsung Electronics’ legal team. But that doesn’t necessarily mean that Samsung plans to enter a comprehensive cross-licensing period with Apple over patents owned by the companies,’’ said Samsung spokesman Shin Young-june.

``Ji’s proven experience in handling various patent-related issues will help us strengthen our capability in ongoing and potential future issues,’’ Shin added.

Samsung’s legal team is in deep internal talks on whether it will additionally challenge Apple on antenna-related patents.

The iPhone 4S will likely violate Samsung-owned patents when it determines which of the two antennas has the better signal strength at any one time.

``We’ve recognized it. Further action is likely,’’ said a senior company executive familiar with the matter.

Samsung is seeking a complete sales ban on the iPhone 4S in France and Italy because the Korean company believes it will win considering its increased presence there.

But the executive added that the latest attempted block is unrelated to the patents in question. Steve Park, a local Apple representative, declined to comment.

Two-track approach

The ongoing legal fight could see major breakthroughs as Samsung is expected to expand the number of countries that it will file in after a court in the Netherlands accepted Samsung’s request to ban sales of Apple’s iPhones and iPads.

Apple recently won a sales injunction against Samsung devices in the Netherlands and Germany and is also seeking a sales ban on Samsung products in Australia. In a retaliatory action, Samsung requested a court in the Netherlands to stop Apple from selling its popular i-branded products, there.

``Samsung maybe the sole firm globally who guarantees product commitment, quality, on-time delivery and pricing. Apple knows it,’’ said the executive, reiterating that Apple will become Samsung’s biggest overseas partners this year.

Despite the legal feud, Samsung said its operating profit during the July-September period will be over 4 trillion won, far better than the earlier market consensus of between 3.5 and 3.7 trillion won, thanks to outstanding performances of Samsung’s Galaxy-branded smartphones.

Samsung should pass Apple to become the world’s biggest smartphone maker from the third quarter and is expected to rise to the world’s biggest mobile phone maker overall, beating Finland-based Nokia, according to Samsung officials and analysts.

Despite the current legal issues, Samsung’s top decision-makers were recently in Vietnam to inspect its handset-making facilities there, amid booming demand for smartphones.

Samsung confirmed the strategic business meeting held in Vietnam attended by Samsung chief executive Choi Gee-sung, television chief Yoon Boo-keun and mobile chief Shin Jong-kyun.

``Samsung held a strategic meeting in Vietnam to find more fine-tuned business strategies. An expansion of logistics channels in Southeast Asia and an output increase of Samsung’s premium products were the top issues,’’ said another Samsung spokesman.

Since July this year, Samsung has been churning out its latest consumer products including the Galaxy S II smartphones at its second plant in Vietnam, which is one of Samsung’s seven handset-manufacturing facilities outside the Korean Peninsula.

Including the annual output of the first handset-making plant, the annual output capacity of Samsung’s handset facilities will be increased to 100 million, according to officials.

``Thanks to better tax cuts authorized by the Vietnamese government, Samsung will produce more strategic devices and most of the devices produced there will be exported to Europe,’’ said a Samsung official, adding its plants in Vietnam will play a significant role to widen the market gap with its rivals, including Apple, in smartphones.

``We are doing quite well, however, we don’t know how things will go on. Amid the death of Steve Jobs, Samsung needs to apply more organized and aggressive business strategies in our key markets,’’ said the Samsung executive.