Insight: Apple and Samsung, frenemies for life
By Poornima Gupta and Miyoung Kim and Dan Levine
SAN FRANCISCO/SEOUL (Reuters) - It was the late Steve Jobs' worst nightmare. A powerful Asian manufacturer, Samsung Electronics Co Ltd, uses Google Inc's Android software to create smartphones and tablets that closely resemble the iPhone and the iPad. Samsung starts gaining market share, hurting Apple Inc's margins and stock price and threatening its reign as the king of cool in consumer electronics.
Jobs, of course, had an answer to all this: a "thermo-nuclear" legal war that would keep clones off the market. Yet nearly two years after Apple first filed a patent-infringement lawsuit against Samsung, and six months after it won a huge legal victory over its South Korean rival, Apple's chances of blocking the sale of Samsung products are growing dimmer by the day.
Indeed, a series of recent court rulings suggests that the smartphone patent wars are now grinding toward a stalemate, with Apple unable to show that its sales have been seriously damaged when rivals, notably Samsung, imitated its products.
That, in turn, may usher in a new phase in the complex relationship between the two dominant companies in the growing mobile computing business.
Tim Cook, Jobs' successor as Apple chief executive, was opposed to suing Samsung in the first place, according to people with knowledge of the matter, largely because of that company's critical role as a supplier of components for the iPhone and the iPad. Apple bought some $8 billion worth of parts from Samsung last year, analysts estimate.
Samsung, meanwhile, has benefited immensely from the market insight it gained from the Apple relationship, and from producing smartphones and tablets that closely resemble Apple's.
While the two companies compete fiercely in the high-end smartphone business - where together they control half the sales and virtually all of the profits - their strengths and weaknesses are in many ways complementary. Apple's operations chief, Jeff Williams, told Reuters last month that Samsung was an important partner and they had a strong relationship on the supply side, but declined to elaborate.
As their legal war winds down, it is increasingly clear that Apple and Samsung have plenty of common interests as they work to beat back other potential challengers, such as BlackBerry or Microsoft. Continued...