The markets have reacted swiftly to the landmark judgement granted to Apple against Samsung. In heavy trading (around four times the daily average) Samsung’s shares plummeted by 7.5 percent taking more than $12 billion off the electronic giant’s market value. The market is clearly worried that the $1.05 billion in damages ordered by the Californian jury and the prospect of a complete ban of Samsung’s key mobile products will do irreparable damage to the company.
“There are still too many variables including the final ruling to come at least a month from the recent verdict, and whether there will be a sales ban on Samsung’s main sellers such as the Galaxy S3,” said a Korean fund manager to Reuters.
The verdict has also been seen as bad news for Google, who of course makes the Android OS that runs on Samsung’s phones and tablets. After the verdict, Google’s share price dropped over $10, but has since started to rebound. Other tech companies however are seeing a boost from the verdict. Shares in Nokia, the Finnish mobile phone maker who is using Microsoft’s mobile OS, rose by 10.2 percent. Microsoft’s European-listed shares were also slightly up.
Nokia has been struggling for survival after losing market share to iOS and Android based phones. Last year it made an alliance with Microsoft and is now the world’s largest maker of Windows Phones, but it still has less than 5% of the smartphone market.
According to an internal memo that was sent to Samsung employees, the South Korean giant reminds its employees that “consumers and the market will side with those who prioritize innovation over litigation” and that history has shown that companies win the hearts and minds of consumers by pursuing innovation and not “the outright abuse of patent law.” This is in stark contrast to Tim Cook’s message to Apple employees which said that the company values “originality and innovation” to make “the best products on earth.”
Both sides noted that they didn’t want a court case. Samsung said it “initially proposed to negotiate with Apple instead of going to court” as they had been one of its most important customers, but it was Apple who “pressed on with a lawsuit.” Apple in turn said it “chose legal action very reluctantly” and only after repeatedly asking Samsung to stop copying its work. Cook reminded his employees that the lawsuit wasn’t about the money but was about values.