Chapter 1: Introducing the Company Problem
In 2010 August Apple raised concerns to Samsung as it believed some of the tablets and phones that were being produced by Samsung infringed on Apples patents. Since Samsung is a major Apple trusted partner, Apples objective was to work out a deal. The proposed deal was that Samsung was expected to pay up to $30 per phone and for every tablet $40 (Black, 2013). This proposed deal was in comparison to the six months earlier deal that was agreed between HTC and Microsoft where HTC paid $5 for every Android device they sold to Microsoft (Black, 2013). However, Samsung declined Apples proposed deal. In 2011, Apple sued Samsung with a claim that Samsung was producing slavish items that it copied its product designs a counter suit Samsung filed claims against Apple in Germany, Japan, and Korea over 3G technology patents. Later in September 2011, Apple put on hold the sales of Samsung Galaxy Tab 10.1 in Australia with a claim that the design of the tab closely resembled iPad. Notably, both companies starts to get very specific on the patents at play. Apples patents included; design elements on their gadgets including the slide-to-unlock feature, rubber banding and the universal search features available on their devices. The Samsung complaints were centers on the standard essential patents available for the 3G mobile technology that ideally is supposed to be available for everyone on reasonable and non-discriminatory (FRAND) terms (Goggin, 2012).
At one time the courts offered harsh comments regarding Apple patents by calling them obvious which is a term that is used in technologies that do not deserve the awarded patents. Moreover, the courts decision that Apple patents on slide-to-unlock and the auto-correct patents were regarded as invalid. These comments angered the Apple management team especially with the realization on the time and energy that is oft spent before Apple launch a new phone in the market. Moreover, the aim of the Apple smartphones are not meant to be regarded as ordinary gadgets that can offer the needed services to the consumer; rather the phones are designed for the executive people in the society. Therefore, with the similarities designs that were first witnessed between Apple and the Samsung Galaxy launched and the tablet caused a lot of mayhem as some customers argued there was o need to spend so much money on an Apple phone yet they could still enjoy the stylistic designs offered by the Samsung phones with the much similarities. However, in 2012 the court in California sided with Apple and decided on its award of over $1 billion worth of damages. Since then the companies decided to scuttle their international disputes and focus solely on the US law courts to deal with the never ending battle as the Samsung team countersued on the Apple awarded damages of over $ 1billion in damages. Critics have raised concerns that the wars between Apple and Samsung will continue for countless years as both sides are not only interested in the monetary reward that comes with the fights but also the publicity with the suits. However, there are several disadvantages that are associated with the lawsuits between Apple and Samsung including a lot of time and money is spent in the legal courts, there is continual blame on the copy cat of the products and some consumers are losing trust in use of the company brands products especially when they realize they can enjoy the same product designs at a cheaper price and lastly the continued wars between Apple and Samsung has resulted in the creation of international conflict among other smartphone manufacturers. Especially now the Chinas high production of its phones that mimic the first smartphones of the two giant companies and in turn this has potentially reduced the market shares for the Apple ad Samsung. Apple approximate consumers are 166 million worldwide, but the number is constantly under threat of the wars between the company and Samsung over the intelligent property. With the company leading market share constituting of outside the US, the continued patent wars between the two giant companies can either potentially cause significant harm to the business or act as a very profitable marketing strategy.
Chapter 2: Stakeholders involved
who are the market and non-market stakeholder affecting the business in this case
Stakeholders defined as any individuals, groups or companies that can potentially influence the progress of an organization, their impact can either be positive or negative. The marketing stakeholders are those who are engaged in boosting the sales, increment n the company brand awareness, determine the position of the product in the market and also ascertain the pricing of the product. Therefore, marketing stakeholders are involved in the marketing strategy of the products and also other economic transactions (Lohr, 2011). They include; customers, staff, financial institutions and other service providers who notably devote time, effort and money so as to ensure the company gains the needed success. During the battle between Apple and Samsung over patent rights over the years has significantly impacted on the marketing stakeholders. Critics have blamed on Samsung lack of investment in its innovation and research department and in turn relied on Apple innovation (Chia, 2012). This claim could harm the company significantly as many of the stakeholders could start to consider even some of their branded items as counterfeits that potentially have bridged Apples patent rights.
The non-market stakeholder is external stakeholders who are not directly involved in the daily operations of the business but have the potential to influence the company operations. Examples include; internal revenue services, Occupational Safety and Health Administration and charitable organization among other political and social forces. The non-market stakeholders despite them not having a direct control of the products sales in the market, they act as a very high wave on determining the company sales of the products. The regulatory services that are offered by the non-market stakeholders could negatively harm the sales of a product in the market. Example Germany issued a ban on the sale of Samsung Galaxy 10.1 in its country which in turn damaged the overall company sales despite its attempt to rectify the mistakes committed in the design that had resulted in the patent wars with Apple.
Mapping analysis for this case
The litigations for this case started in 2011 with Apple first filing against Samsung in April 2011. The accusation was based on its iPhone and the iPad similarity with Samsung products. After that, Samsung countersued and the case when back to court in August 2012 (Carrier, 2012). The jury a time sided with Apple and Samsung was to pay Apple approximately $1.05 billion in damage to Apple for the majority of its patent infringement. Samsung which had asked for about $420 million as countersuit did not get any of the amounts. However, in March 2012, a judge ordered a new trial and recalculation were done on the damages that Samsung was to pay Apple and approximately $ 405 million was removed from the original agreement (Carrier, 2012). But in November 2013 the jury added $ 290.5 million to Apple on damages
The regulation by the government for this case
Base on the previous trials conducted between the Apple and Samsung, it is not really about the costs that are incurred on either side of the companies. Both companies Apple and Samsung generate billions of dollars in profits annually. For the Apple Company, the war is about the pride of the company on its inventions and protection of its position in the market. While for Samsung it is about proving that the business is also an inventor (Lohr, 2011). The government has had challenging time over the years to try and control the case between the two companies, and there have been measures undertaken. First, the government of the US issued a ban on the previous iPhone 4 series from being sold in the US as the company products were ruled to have infringed some of the Samsung patents. However, despite the ban being issued, the company did not suffer much as most of the enterprise market are international and not the US locally. Second, the US legislation has continually allowed the two companies to revisit the cases based on their interest and countersue each other with everytime the law giving them an opportunity to either side electing on the jury that will side with the company. However, despite the desire for either company to end the wars, it is highly unlikely, and in return, the companies are spending thousands of dollars in the courts as billing charges for the cases. A significant regulation was witnessed when both companies decided that they will resign all other international cases that had spanned in four other continents and allow the patent wars cases be heard and ruled only in the US law courts (Goggin, 2012). Lastly, if the US court was to follow keenly on the advice of the government, which only has advisory powers in the circumstance, the case will be sent back to the lower courts for more legal disputing in which it has already become a drawn-out battle between the two world-leading smartphones makers.
The interaction of the business with the market and non-market stakeholders in this case.
Over the years since 2010, there has been a significant influence of the marketing stakeholder in both the companies (Apple and Samsung). A substantial amount of money has over the years been spent in the law courts by both companies as they try to solve their patents wars. The cases are noted to continue in a never ending battle between the Apple calming back its glory as being the ultimate top innovator in smartphone companies while Samsung is also proving that it can also be an innovator. The marking stakeholders have a significant role to play in the outcome of the case. First, the respective company customers may be willing to continue enjoying their individual company products without much being affected by the ruling being done. Example, despite the cases where Samsung has tried to prove that Apple has infringed on its patents, the company is continually making significant sales in its top-priced gadgets. Moreover, there is a notable trend between the market and stakeholders loyalty. The companies always have in mind the actions they undertake to protect their marketing stakeholders and ensure the bubble is not broken resulting to disloyalty that potentially can harm the company sales volumes. The non-marketing stakeholders of the company are mainly the regulators of the company operations. The government bans have had an impact on the company sales with the reduction in the market shares which is not a good sign for the business. The wars between the two countries got the attention of the US Supreme court, and interestingly, neither of the companies had any interest in the judicial decision as both companies central business model are based on intellectual property litigation rather than the development of real products (Mueller, 2016).
Chapter 3: Impact on the business in this case
The business and society issues.
Critics have raised concerns on the companies battles as they have potentially been used as a marketing strategy for their products. Moreover, small and considered insignificant things can make a large difference in the overall sales of the company over sales. Both companies have lost in various lawsuits and turn, has significantly lost not only the company sales but also the trust of consumers is greatly reduced. Example Germany has current bans on the sales of Galaxy 10.1 ad Galaxy SII smartphone while the US has a ban on all the Apple smartphones and the tablets that were before iP...
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