Apple Bests Samsung in Australia -- Who's Next? (AAPL, SSNLF, GOOG, MMI)

Consumer Electronics

Published: October 13, 2011 10:22 am

Last Updated: April 27, 2020 4:15 pm

An Australian court has ruled in favor of Apple Inc. (NASDAQ: AAPL) in a patent dispute with Samsung Electronics (OTC: SSNLF). Apple won an injunction preventing Samsung from selling its Galaxy Tab 10.1 tablet in Australia as long as it uses features the Apple claims infringe on its patents.

It’s not a stretch to believe that Apple’s many lawsuits are aimed at Google Inc. (NASDAQ: GOOG) and its market-leading Android operating system. Google’s proposed acquisition of Motorola Mobility Holdings, Inc. (NYSE: MMI) only intensify Apple’s desire to slow down the growth of Android, and the weapon the Cupertino company has chosen seems to be cost.

Samsung and Google have delayed the introduction of Google’s latest smartphone, the Nexus Prime, which was originally scheduled for last week. The stated reason for the delay was respect for Steve Jobs, but Samsung may have wanted the delay until the Australian ruling came down. Samsung’s Galaxy S II smartphone is the target of another Apple lawsuit, this time in the US, and the company probably figured that a similar lawsuit would be filed if Apple won in Australia and the Nexus Prime had been introduced.

Apple’s lawsuit against the Galaxy smartphone seeks to ban its sale in the US. That is not likely to happen, but it could force Samsung to pay licensing fees and royalties to Apple. Samsung would certainly look to Google for help paying those costs. That’s a precedent that Google would absolutely wish to avoid.

Samsung is not taking the loss in Australia lying down, though. The company has set up kiosk stores near Apple’s retail store in Sydney and is offering its top-of-the-line Galaxy S II smartphone for just $2.00 in an effort to battle the introduction of Apple’s latest iPhone 4S. Lines are long at both stores.

Rival smartphone and tablet makers can’t afford to have product introductions delayed by Apple lawsuits. The industry just moves too quickly. That fact argues for eventual licensing and royalty settlements all around, but Apple is clearly in the driver’s seat for now and is likely to drive a pretty hard bargain with the other handset makers. They, and Google, may have no better choice than to pay up.

Paul Ausick

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