Samsung may have won a small victory in South Korea, but it took a big hit in the U.S. as a jury ordered the handset maker to pay rival Apple more than $1 billion. The jury ruled that Samsung infringed on several of Apple's iPhone software and design patents.
"The lawsuits between Apple and Samsung were about much more than patents or money," Apple crowed in a statement on Friday. "They were about values. At Apple, we value originality and innovation and pour our lives into making the best products on earth. We make these products to delight our customers, not for our competitors to flagrantly copy."
Samsung, Google Lash Back
But Samsung isn't just rolling over and playing dead. The South Korean tech giant says it plans to appeal. Samsung released an internal memo revealing it had tried to negotiate with Apple, which it called one of its most important customers, but Apple continued with the lawsuit.
"History has shown there has yet to be a company that has won the hearts and minds of consumers and achieved continuous growth, when its primary means to competition has been the outright abuse of patent law, not the pursuit of innovation," Samsung said in a statement. "We trust that the consumers and the market will side with those who prioritize innovation over litigation, and we will prove this beyond doubt."
With so much at stake with its Android mobile operating system, Google also got in on the reactions. Google's Sunday statement said the court of appeals will review both infringement and the validity of the patent claims.
"Most of these don't relate to the core Android operating system, and several are being re-examined by the U.S. Patent Office," Google said. "The mobile industry is moving fast and all players -- including newcomers -- are building upon ideas that have been around for decades. We work with our partners to give consumers innovative and affordable products, and we don't want anything to limit that."
We caught up with Avi Greengart, an analyst at Current Analysis, to get his take on the billion-dollar verdict. He told us Android handset makers are going to see costs rise because they have not been paying an Apple royalty to date -- and a billion-dollar judgment could put some of the smaller handset makers out of business.
"If you are going to have to pay Apple for IP and you are going to have to pay Microsoft for IP, why not just pay for Windows Phone?" Greengart said. "If it becomes more expensive to build an Android phone because of IP licensing costs than it would to build a Windows Phone, Microsoft could actually benefit from that."
According to The Wall Street Journal, Apple offered Samsung settlement costs on order of $24 a phone, which it declined. Other industry rumors indicate Microsoft charges between $5 and $15 a phone to license the Windows Phone operating system.
"Right now if you are Samsung you are still making a lot of money on Android with the Galaxy line," Greengart said. "It's going to be tough to simply walk away from that, and I don't believe they will, but if you are a marginal vendor I think you need to start looking at how much it costs to play in this game."