Monday, October 29, 2012

Samsung gains on consumer choice's approach

Consumers talk with a shop assistant at a sales outlet of Samsung Electronics in Seoul in this undated file photo. The Korean technology giant has widened its market gap with Apple in smarthphones on the back of brisk sales of the Galaxy S III. / Korea Times file

Samsung’s final argument in the San Jose court, Calif., in August was ``customers make choices, not mistakes.’’ Then Samsung legal counsel Charles Verhoeven insisted no analysis was presented on whether or not any customers were confused at the point of sale and contended that there was no deception or confusion.

But the claim was simply rejected as the nine U.S. jurors awarded Apple $1.05 billion for Samsung’s willful infringement on Apple patents. Verhoeven’s claims seems right, at least as Samsung is receiving more favorable responses from customers globally since the California verdict.

The reason seems clear ― Samsung is shipping more phones than Apple, though Apple is keeping the factory utilization rates of its major suppliers such as Foxconn Technology high.

Apple has had impressive sales of its popular iPhone and iPad over the past few months. But they were mainly in the important United States market, its home turf. Leading market research firm Strategy Analytics said Samsung achieved a record 35 percent global share, followed by Apple.

During the July-September period, Samsung shipped 56.9 million smartphones, globally, which is enough to send it to grab a 35 percent market share.

``This was the top number of units ever shipped by a smartphone vendor in a single quarter,’’ said Strategy Analytics Executive Director Neil Mawston.

Despite the deepening patent litigation with Apple and rivalry in outlets and stores, Samsung has continued to deliver what Strategy Analytics described as ``numerous hit models’’ from the high-end Galaxy Note phablet to the mass-market Galaxy Y.

In contrast, Apple shipped 26.9 million smartphones globally, giving it a 17 percent market share, a 3 percentage point increase from a year earlier.

``No matter what the situation is, Samsung mobile devices are selling well, globally, as the firm is ideally-positioned to mass-produce various models with different sizes. The California verdict was the factor that persuaded our technicians and designers to do more work,’’ said a senior Samsung executive by telephone asking not to be identified.

The executive, directly involved with Samsung’s mobile business, stressed the company will push more to widen its gap with Apple further. IDC Corp., another leading research firm, said Samsung shipped 56.3 million handsets, followed by Apple with 26.9 million. As part of its aggressiveness in Web-connected devices, the Korean company confirmed that it will build another handset factory in Vietnam.

``Samsung is ready to significantly boost its annual production output to enjoy a stable lead over rivals in the smartphone race,’’ said the executive.

``Cross-licensing only makes sense for either party if there is something in it for both of them. I cannot see that that is the case, unless one party has or will achieve a technological advantage over the other in a technology that is crucial and imperative to maintain market share,’’ said Severin de Wit, the founder of the Intellectual Property Expert Group (IPEG) consultancy, in an interview.

The former judge in The Hague District Court, who managed various litigations, related to the electronics industries, continued: ``As soon as a dominant player in the market loses market share (Apple) against a forceful newcomer (Samsung), the fight shifts from the marketplace to the court. Both Apple and Samsung perfectly realize that there has never been any company in the world that managed to throw competition out of the market all together by means of patent litigation only, so what is the ultimate goal of this costly litigation strategy?’’

According to his observations, this fight is aimed at keeping market dominance for Apple or to achieve effective market entrance by Samsung. ``So, patent litigation is therefore not a goal by itself but rather a supporting market tactic, but always part of a larger corporate strategy to increase market share,’’ he said.

Samsung is aiming to ship more than 300 million smartphones next year capitalizing on developing Asian nations such as those in Southeast Asia and the Middle East, where Nokia had enjoyed a firm lead a couple years ago, said Samsung officials.

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