Samsung Galaxy Taking on Apple iPhone?
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Case Code: BSTR501 Case Length: 14 Pages Period: 2011-2016 Pub Date: 2016 Teaching Note: Available |
Price: Rs.400 Organization: Samsung, Apple Industry: Retail Countries: India Themes: -- |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
The Rivalry
Both the companies were the top selling smartphone companies in the world, with the competition between them intensifying in 2011. A patent issue flared up between the two companies in early 2011 that cost both of the companies billions of dollars in legal charges. Apple alleged an infringement of its patents, claiming that some of the iPhone’s features had been copied into Samsung Galaxy. Two of these, according to Apple, were the basic shape of the iPhone and the way the screen bounced back when users scrolled to the bottom. Apple sued Samsung for damages amounting to $2.5 billion and claimed that “Samsung undermined its marketing efforts, reputation and business by selling devices that copied the iPhone”. It also alleged that “Samsung weakened the world view of Apple as a great designer and innovator...” Samsung refuted the claims and countersued Apple on the grounds that Apple had infringed upon its patents. Samsung maintained its stance saying, “If a manufacturing customer merely approaches Samsung with a request for a new kind of processor that information is valuable, “It’s not copying, and it’s not illegal”. Samsung held its stance saying that “Samsung as a supplier would not have to break the law to use its position to its advantage, as information of its competitor was invaluable in predicting and in decision making at least three months ahead”....
Going Forward
In April 2016, just a few hours after Apple declared its first year-on-year quarterly revenue decline since 2003, its shares fell by 8 percent. The fall in shares caused a total $47 billion drop in Apple’s market value. Tim Cook , the CEO of Apple, tried convincing the investors, saying that it was not the iPhone itself but the sluggish sales in the smartphone industry on the whole that was to blame. Apple hoped that the flashy iPhone 7, with an organic cover and a substantial physical redesign, from wireless charging, a smart connector to a touchscreen with built-in Touch ID, to be launched in September would pep up its dropping sales...
Exhibits
Exhibit I: Timeline of Apple iPhone’s Launches
Exhibit II: Timeline of Samsung Galaxy Launches
Exhibit III: Sales of Samsung Galaxy and Apple iPhone from of 2014 to the first quarter of 2015
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