Samsung expected to adjust designs after $1B jury award to Apple

Impact on Samsung still seen as minor

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The biggest problem facing vendors who decide to come up with new designs is the length of time that process might take. Android manufacturers could take longer to bring products to market if they try to develop new designs -- and that would give Apple a window in which it could sell more of its products, analysts agreed.

Morgan Stanley analyst Katy Huberty issued a research note saying that the $1 billion in damages levied on Samsung is a "relatively insignificant" sum, given Apple's $120 billion in cash and investments. However, she added, "in our view, the bigger win for Apple is the competitive ramifications if other smartphone vendors experience lengthened product cycles and are forced to alter their software and hardware to endure unique designs relative to Apple products."

Analyst Ben Reitzes at Barclays also said that "competitors might think twice" about how they compete against Apple, and that re-evaluation process would likely slow down their product development cycles and give Apple a chance to sell more of its products. He suggested that if Apple sells 10 million more iPads and 20 million more iPhones because competitors have to delay product introductions, it would add $17 billion in revenue and more than $5 in earnings per share.

Apple on Monday might ask U.S. District Court Judge Lucy Koh to bar as many as 20 Samsung products from sale in the U.S., but it isn't clear whether such a request would include the latest Galaxy S III or Galaxy Note smartphones and the Galaxy Note 10.1 tablet.

The smartphones that Samsung has produced in the past year, especially the Galaxy S III, have more features that distinguish them from the iPhone than some earlier Samsung smartphones had, analysts noted.

Sun Tae Lee, an analyst at NH Securities and Investment in Seoul, South Korea, said Samsung must make it a priority to stop any injunction against Galaxy S III sales in the U.S. and to avoid any impact on the upcoming Galaxy S IV.

"Apple could demand Samsung stop selling devices," and Samsung would create alternatives, said Jeffrey Kagan, an independent analyst. "I would bet that Samsung is already working hard at just that. ... That's why long term I don't see this [jury award] as being a problem for Samsung or Google."

Gene Munster, an analyst at Piper Jaffray, offered a similar view. "Net-net, we do not believe Samsung will see any meaningful interruption, likely only minor interruption, in device sales in the U.S.," he said. "We do not believe further settlements [instead of lawsuits] are likely to hamstring Android in any serious way."

Jack Gold, an analyst at J.Gold Associates, said the jury's verdict will apply only to older devices. "I think many of the Samsung phones may have already moved beyond [the designs affected by the verdict]," he said, "so the impact will primarily be a financial penalty if it holds up on appeal."

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen, or subscribe to Matt's RSS feed. His email address is mhamblen@computerworld.com.

See more by Matt Hamblen on Computerworld.com.

Copyright © 2012 IDG Communications, Inc.

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