The Korea Herald

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Apple’s victory could backfire eventually: UBS

By Korea Herald

Published : Aug. 26, 2012 - 19:23

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HONG KONG (Yonhap News) ― Apple Inc.’s victory over Samsung Electronics Co. in a lawsuit in the United States will likely force Apple’s competitors to be more creative, market watchers said Sunday.

Investment bank UBS said if the jury recommendation is upheld in the U.S. court, it will have far-reaching implications throughout the industry, especially for rival smartphone makers.

“In the short to intermediate-term, an Apple win that forces competitors to come up with different designs should be positive for Apple, because Apple is a better designer and could have a monopoly on key features,” said Steven Milunovich, an analyst at UBS.

A California federal jury ruled that Samsung infringed several of Apple’s patents for mobile devices, and ordered the South Korean company to pay $1.05 billion in damages. The jury decided that 25 of Samsung’s smartphones and tablets violated Apple patents.

While the world’s two top smartphone makers wait for Judge Lucy Koh’s final ruling, the verdict has cast dark clouds over Samsung’s booming sales of smartphones and tablet computers in the U.S. market.

UBS expected the court decision, which is expected to be overwhelmingly in favor of the iPhone maker, could eventually backfire.

“In the long run, it could hurt Apple, because the real threat is not a competitor beating Apple at its own game but instead changing the game,” Milunovich said.

“The likelihood of Apple being leapfrogged or a rival creating a new category is greater if they have to think outside of the box.”

Samsung and Apple together control more than half of the global smartphone market. In the second quarter, Samsung’s market share stood at 32.6 percent, followed by Apple with 16.9 percent, according to market researcher IDC.