Patent battle helps Samsung and Apple’s sales and brand values

Posted on : 2012-10-04 13:53 KST Modified on : 2019-10-19 20:29 KST
Patent war has enhanced the image among consumers that the two companies stand above the competition
 2011 file photo a lawyer holds an Apple iPad and a Samsung Tablet-PC at a court in Duesseldorf
2011 file photo a lawyer holds an Apple iPad and a Samsung Tablet-PC at a court in Duesseldorf

By Kim Jin-cheol, staff reporter

In the patent war between Samsung and Apple, blows have been dealt and received by both and each has had their wins and losses, but when all is said and done, both sides seem to have come out ahead. With a boost in brand recognition and marketing to both of the companies, all other brands are now out of sight and out of mind for most consumers. The battle has waged all across the world now for a year and a half and the tit for tat has continued on ad infinitum, but in terms of sales numbers and the less tangible world of brand value, both sides have cleaned up.

According to poll results announced on Oct. 3 by market researcher Localytics, sales of Samsung’s Galaxy S3 handset increased by an average of 9 percent every week since the trial against Apple began in a California courtroom on Aug. 1. Specifically, between Aug. 21 and Aug. 27, in the week immediately following the sweeping victory that the jury delivered to Apple in the case, sales of Samsung‘s flagship device saw a major increase. Even during the week surrounding the announcement of the iPhone 5 on Sept. 12, Galaxy S3 sales took flight.

Daniel Ruby, director of Online Marketing at Localytics, said that the intense spotlight cast on the firm by the media throughout the case focused interest on Samsung and helped to foster the image that Samsung devices were a worthy stand-in for Apple products. There was a flood of press coverage after the release of Apple’s latest offering that compared it and the Galaxy S3 and continued to hint that Apple’s and Samsung’s best are neck and neck.

Aside from victory in the courtroom, Apple has also secured major marketing perks. As the patent war raged on, Apple lost its crown of top smartphone producer to Samsung, but the image of the industry as a two-horse race has taken root and left the other players with an even smaller piece of the pie. After watching from the sidelines as Apple lodged a string of lawsuits against Samsung, the plethora of PC makers who had been falling all over themselves to charge into the smartphone marketplace, have largely decided to stay out of the market altogether. There was indeed pent-up demand for a new iPhone, but with even faster sales than existing devices, many are also suggesting that the patent battle helped move units for Apple as well. According to market watcher ComScore, the Galaxy S3 edged out the iPhone 4S to capture the lead in sales in August, but following the release of the iPhone 5, Apple immediately closed the gap in market share, while the remaining figures in the market, including LG, RIM and Motorola, have continued to slide.

The brand value of both firms has also grown over the last year. According to calculations by Interbrand, Apple moved from 8th on the list to 2nd in the last year, while Samsung jumped from 17th to 9th. In terms of actual brand value, apple increased by 129 percent to US $76.6 billion, while Samsung moved up to $32.9 billion, an increase of 40 percent. On the other hand, Apple’s brand value went from 1.4 times that of Samsung to 2.3 times in the same period.

With the battle being an apparent boon for both sides, the patent war looks set to rage on for the foreseeable future. Samsung, for its part, lodged a suit against Apple claiming that the iPhone 5 infringes on Samsung’s patents earlier this month and has asked the judge who presided over their major loss in August to toss out the jury’s ruling in that case. Now many analysts are suggesting that Apple will expand its complaint to include the Galaxy Note 2. An industry insider said that considering the appeals and additional lawsuits, the legal battle will likely continue for the next 2-3 years.

 

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