Inter-Organizational Studies - Current Event - Shinea Sharma

Inter-Organizational Studies - Current Event 

Apple Inc versus Samsung

   The legal concept of copyright dictates that the original creator of a product deserves exclusive rights to it. Infringement of this concept is seen as a violation of the creator’s intellectual property rights. However, some companies try to eliminate competitors by claiming that their patent rights have been breached. Apple Inc., the maker of iPhone and iPad, is expected to rock horns with Samsung in courtroom over claims of breach of patent rights and unfair competition (Levine & Gupta, 2012). Apple has sued Samsung over allegations that Samsung has copied the design of Apple’s iPhone in manufacturing its Smartphones. Apple argues that Samsung blatantly copied its design thereby infringing its intellectual property rights. On the other hand, Samsung has counter-sued Apple claiming that Apple is trying to block competition in order to continue enjoying excessive profits in the US market (AFP, 2012). 
   
  Apple Inc. is a multinational cooperation located in the USA, and it manufactures and sells personal computers, computer software and consumer electronics. The company was founded in 1976 by Steve Jobs and Steve Wozniak, and it has come to known for its populous products such as the iPod, iPhone and the iPad. Currently, Apple Inc is only behind Samsung and Nokia in the mobile phone trade industry.  Samsung electronics is a South Korean multinational information Technology and Electronics Company, which is a subsidiary of Samsung Group. Samsung is the leading company in mobile manufacturing industry and it controls the mobile phone market more than any other company in the world (Chen, 2012). The company has recently introduced Smartphone S III, which has hit the ground running almost instantly. However, this product has seen the two titans in the mobile phone market upgrade their antagonism to courtroom battles. 

    The case will take place in a federal court in California, San Jose. The outcome of the case has the potential to reshape the ever-evolving mobile phone market, which is hugely controlled by the two antagonists. Should Samsung lose the case, it will be forced to pay Apple in excess of $2.56 billion, which could actually be tripled (Levine & Gupta, 2012). In addition, Samsung would be prohibited from selling its tablet computers and Galaxy smartphones in the US market. Undoubtedly, this would be a serious blow to Samsung considering that at acquires more than 20% of its profits from the US market. On the other hand, should Apple lose the case, it will be forced to pay Samsung exorbitant financial damages and sale of its iPhose S4 would face a brisk future. Samsung has swiftly outperformed Apple, as well as Nokia in the mobile phone market and it is currently the world’s most recognized smartphone manufacturer.

     At the moment, US consumers seem to prefer Samsung’s S III to Apple’s iPhone S4 because the former is better and user friendly than the latter. This is a significant competitive threat to Apple considering the market antagonism it is currently facing from Hauweii Mobile Phones. The Wall Street had predicted that Apple Inc. would sell approximately 28 million iPhone between January and June of 2012. However, Apple Inc managed to sell only 26 million iPhones, which is a sign of increasing competition and defeat by Samsung’s smartphone S III, which recorded sales exceeding 50 million smartphones (Bloomberg, 2012). Therefore, it can be argued that Apple Inc is employing excessive legal claims to derail the sales of smartphones until it launches iPhone S 5, since iPhone S 4 has been defeated.  Nonetheless, the jury will decide.

     The possible outcome of the case will significantly affect the financial stability and competitive edge of the loosing company. Thus, financial managers in both firms should be introducing cost-cutting measures in order to guarantee financial health of their firms. In case of Samsung, the marketing managers should heighten the campaigns for smartphones in the US in order to make more sales before the case is decided. In addition, they should advertise more in smartphones emerging markets such as Australia and South America. This would guarantee or even exceed the level of sales even if the case is lost. Finally, Samsung’s production managers should be thinking of another, better design, which would serious defeat Apple’s iPhones.           


References

AFP. (2012, July 22). Samsung smartphone sales booming. News24. Retrieved from     "http://www.news24.com/SciTech/News/Samsung-smartphone-sales-booming-20120722" http://www.news24.com/SciTech/News/Samsung-smartphone-sales-booming-20120722
Bloomberg. (2012).  Samsung Beats Apple in Smartphone Sales. Bloomberg Tv. Retrieved from    
"http://www.bloomberg.com/video/91596700-samsung-beats-apple-in-smartphone-" http://www.bloomberg.com/video/91596700-samsung-beats-apple-in-smartphone-sales.html

Chen, B. (2012). Samsung’s New Galaxy Phone Tops 10 Million Sales. The New York Times.     Retrieved from http://bits.blogs.nytimes.com/2012/07/23/galaxy-s-iii-10-million/
Levine, D.  & Gupta, P. (2012, July 27). Apple, Samsung take patent fight to crucial California     trial. Reuters. Retrieved from 
"http://www.reuters.com/article/2012/07/27/us-apple-samsung-trial-idUSBRE86Q16X20120727" http://www.reuters.com/article/2012/07/27/us-apple-samsung-trial-idUSBRE86Q16X20120727