Why Apple seeks $2.2 billion from Samsung in a patent trial

Market Realist

Android could represent over 50% of worldwide devices by 2015 (Part 2 of 5)

(Continued from Part 1)

The patent infringement case between Apple and Samsung

In the last article of this series, we discussed how Google’s (GOOG) Android operating system is poised to become the dominant player in not just the smartphone market but also the overall device market. Samsung (SSNLF) is the largest player in the smartphone market that uses Android’s operating system. So Samsung’s fortunes are very important to Android. The patent infringement case between Apple (AAPL) and Samsung has been going on for a long time. During the testimony in the second patent trial between Apple and Samsung on Tuesday, Christopher Vellturo, an economist and Apple’s damages expert, said the full damages claim for Apple stands at $2.19 billion for lost profits and royalty fees on infringed patents. Vellturo further stated that the patent infringement covered more than 37 million smartphones and tablets Samsung sold in the U.S. from August 2011 to the end of 2013.

Samsung could be bracing itself for a tough 2014

If the court rules in favor of Apple, then it will be a big loss to Samsung, which is already facing business risks in 2014. Although Samsung maintained its leadership position in the smartphone market in 2013 with a share of 31%, 2014 could be a tough year for Samsung. We discussed Samsung’s 2014 prospects in the Market Realist series titled “Why Samsung forecasts falling profits for 1st quarter 2014″.

In this series, we discussed the two main reasons for Samsung’s operating profits decline: the average selling price decline of Samsung’s devices due to increasing competition from Apple in the high-end smartphone market and from Lenovo (LNVGY) and HTC (HTCKF) in the low-end of the market, and Samsung’s inability to control its increasing marketing expenses. We also discussed why Samsung’s flagship smartphone, the Galaxy S5, is off to a slow start, and how Apple and Lenovo could emerge as competitors to Samsung in 2014, further increasing Samsung’s headaches.

Continue to Part 3

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