Samsung moves to counter Apple’s injunction

Apple has filed a sales injunction on eight old smartphone models of Samsung Electronics to a U.S. federal court in San Jose, California, where a nine-member jury gave a verdict in favor of their local tech company.

The eight are: Galaxy S 4G, Galaxy S2 (AT&T), Galaxy S2, Galaxy S2 (T-Mobile), Galaxy S2 Epic 4G, Galaxy S Showcase, Droid Charge and Galaxy Prevail.

Its sales ban request did not include Samsung’s latest flagship Galaxy S3 and tablet smartphone Galaxy Note.

Apple’s move has largely been expected by market watchers. Samsung says it will take the so-called “world’s biggest patent war” to the next step as well by motion-filing and appealing, with analysts and legal experts already forecasting this grudge to reach the U.S. Supreme Court.

Whatever the next course of action may be, market watchers claim that this dispute, as in any war, will not likely end with one toasting to victory and the other suffering an outright loss, as both tech giants face risks of a consumer backlash and image deterioration in the short to medium term.

The latest verdict could brand Samsung as a “copycat” in the world’s largest tech market, analysts said, which could further affect sales of Samsung’s Galaxy S3 and Note 2, even though they were not part of Apple’s sales ban wish list.

“The market cannot rule out the possibility of Apple seeking a lawsuit or sales ban against the Galaxy S3 and other Samsung smart products,” said Park Ki-heung, an analyst at Korea Investment & Securities.

Analysts and legal sources also claim that this negative vibe between Apple and Samsung will spread over to consumers, other smartphone and software developers and the telecom industries.

“Consumers will be affected by this as they will have less choice to buy smartphones in the market,” said one legal expert, amid speculation that Apple’s win will lead to price hikes and higher entry barriers to smartphone markets.

Consumer smartphones that run on Google Android account for more than 50 percent, while Apple iOS 34 percent in the U.S. In Korea, Android smartphone users account for 70 percent.

Telecom companies also can turn their backs on Apple, which provides no assistance or funds to market its phones.

Other companies which will likely be affected by this trial, such as Nokia, Google and Ericsson could form an alliance against Apple to edge out the iPhone maker in terms of patents, said Noh Geun-chan, an analyst at HMC Investment.

Financially, both tech companies are cash-rich and can afford to drag the case on and risk billions of dollars in damages and legal fees.

Samsung Electronics, which holds about a 22 percent market share in the U.S., is estimated to lose up to 1.8 trillion won ($1.6 billion), including the 1 trillion won compensation payable to Apple, should the court grant a sales ban on the old models.

The Korean tech company sold more than 21 million smartphones at an average wholesale price of $353 between June 2010 and June 2012. Apple is the biggest smartphone maker in the U.S., with a market share of 37.1 percent.

A hearing on Apple’s sales injunction will take place on Sept. 20.

By Park Hyong-ki (hkp@heraldcorp.com)