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Samsung's Market value plunges by 7% to $ 12 bn

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DQI Bureau
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As the markets opened Monday morning, Samsung was in for a rude shock- shares went for a spin and was down 7%- that's almost $12 bliion in market value shaved in the wake of Apple winning the patents case against Samsung, whose enitire Smartphone strategy has come under a cloud post the ruling in a US court.

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It's all over the place that Apple winning the patents war against Samsung-as a California's district court jury delivered a ruling that Samsung blatantly copied Apple's iPhone and iPad design forms. It also awarded $1 billion in damages in favor of Apple. Over the years both Samsung and Apple had locked horns in a bitter battle over patent violations. But many thought the long drawn legal battles will go in circles with no clear outcomes. But the latest rulings, though not binding as Samsung will go for the appeal, nevertheless adds the much needed fuel for Apple to face other major Android vendors like HTC, which are also closely following the iPhone look alike territory.

For Samsung, it's a wakeup call. As analysts reflect on the verdict, they say that the consumer is the ultimate loser of this whole gamble for supremacy. Today Google's Android OS geos inside Samsung latest mobiles and tablets. Other vendors like HTC has also made a significant shift to Android in the last few years. With the jury now ruling that the patents belonged to Apple and others copied is a message too harsh for players like Samsung to digest as it had pumped in billions on its Android Smartphones and Tablets. Now what that means is in the case of a final ruling that now Android users need to pay a licensing fee to Apple for the features they are using but originally belonged to Apple and not that of Google or Samsung.

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Apple beyond Jobs

In a sense, this victory is a ‘credential victory' for Tim Cook. He had now successfully stepped into the shoes ( at least partially) of the late Steve Jobs and this win will improve his credibility as an able leader to lead Apple after Steve Jobs. Though the patent wars has been raging for long, if Apple had lost its case, it would have hurt Tim Cook's credibility and many would have come to the conclusion that Apple had lost its aggression to fight competition after Jobs demise.

 

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Jitters in Google Camp

While right now the ruling does not name Google directly but these are the patents in question as it is Android that powers Samsung's mobile phones. The key question, users of Android already shell out licensing fee to Microsoft and with now Apple claiming patents, Android users will have no other option, but pay a licensing fee to Apple. The far reaching implications for Android users can been seen from the instances like the ‘pinch app' or the ‘pinch and zoom' or the ‘rubber band effect'. These were clearly inventions of Apple and later followed by other vendors like Samsung. Now imagine if these functions goes out of Android phones, the entire UI and experience will go for a toss.

As Google rolls out Jelly Bean ( Android 4.1) with enhanced UI, the ruling in favor of Apple is a big blow for Samsung's product development. Its future in the US market is in for turbulent times. Also there is a possibility that Samsung will focus more on ‘original innovations' like its home grown OS- Bada that was launched in its flagship Wave phones some 3 years back. But Bada is still an OS in the making and no match to Android's reach.

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Silver Lining -Microsoft, Nokia and RIM

Looking at Apple and Google's competition, Microsoft has been struggling to break the formers bastion while Nokia and RIM got increasingly marginalized in the recent times. Now with this ruling, companies like RIM can hasten its Blackberry 10 platform and has brighter recovery options. Nokia might as well see the revival of the Symbian OS and Microsoft can lure in more hardcore Android vendors like Samsung and HTC to its side for Windows Phone 8.

 Clearly Apple at the end of the day, had put the brakes on non-Apple (read Android) smart phone roll outs and until Samsung fights this case more strongly in the appeals court and justify that contested patents at least some of it are generic to industry and not the domain of Apple will go a long way in making Android a really free software and liberate the users from getting locked with one vendor, just because they came out first with such a feature or functionality.

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