Apple Inc. (AAPL) versus Samsung fray – an exercise in futility

Theoretically, the legal fray between Apple Inc. (NASDAQ:AAPL) and Samsung over smartphone designs should be an engine for innovation. The extended legal wrangles and massive, nearly $1 billion damages awarded to Apple Inc. in the famous 2012 judgment should have acted as a powerful incentive for Samsung at least to take its smartphone developments in fresh directions. Instead, the same struggle continues, expending resources in an apparently futile duel which has come to resemble the tedious, rubbery battles between invulnerable monsters in 1960s Japanese cinema.

The Samsung is indeed a copycat riding Apple Inc.’s (AAPL) coattails to massive profits is a matter of contention among advocates of each firm, but is supported by some facts. For example, the Korean firm patented two products in 2013 which were clearly derivations – to use a polite euphemism – of the Apple Mac Mini and Apple’s Spiral interface, as highlighted by Patently Apple. The sudden change in the Samsung Galaxy smartphone’s design from a small-screen phone with a keypad to a large-screen touchscreen model following iPhone’s initial 2007 release is even more infamous.

Considering the tens of billions of dollars Samsung has earned with its smartphone and other devices, even a billion dollar judgment against it, such as that delivering in 2012, is little more than an additional business expense on a profitable balance sheet. The electronics firm’s management clearly feels the same, since today’s meeting between Tim Cook and Shin Jong Kyun of Samsung failed to avert the upcoming trial due to start on March 31, 2014.

Though Apple Inc. (AAPL) appears to have solid ground in claiming that Samsung frequently rips off its designs for its own products, the battle appears to be an ultimately futile one from the Cupertino firm’s perspective. Samsung simply has too much global clout for even the giant brainchild of Steve Jobs to ultimately put a dent in its armor, much less put it out of business. With China now absorbing 32 percent of annual smartphone production, even a total ban on Samsung sales in the U.S. (a highly unlikely prospect in any case) would probably fail to either destroy the Korean manufacturer or extort its compliance.

From an investor’s point of view, Apple Inc.’s (AAPL) efforts are little more than a bit of grandstanding and revenge, since they are unlikely to affect Samsung’s quite real and deliberate patent infringements. It may be, in short, little more than a mix of face-saving and harassment, and is unlikely to produce massive profit boosts for the American electronics company. Learning from the previous trial, however, investors might want to consider shorting Samsung stocks when the trial end approaches, considering that the last ruling against Samsung caused a seven percent fall in the company’s share prices in the first day alone.

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