Apple and Samsung in truce to face China threat
Longtime rivals Apple and Samsung have settled all patent lawsuits outside the US with analysts saying the duo now prefer to focus instead on the growing threat from Chinese manufacturers in the smartphone market.
In a spectacular U-turn, the two companies announced they would drop all legal action against each other in eight countries including the UK, Germany, France, Australia and Japan.
The agreement, however, does not “involve any licensing arrangements” and the two will continue to “pursue existing cases” in US courts, which carry bigger implications in terms of damages.
The legal running battle between the smartphone makers began in 2011 after Apple sued Samsung for “slavishly” copying the design of the iPhone.
The South Korean firm responded by countersuing Apple in countries outside the US, accusing the American giant of infringing its patents.
The unexpected truce will be welcomed by Samsung as it fights back cheaper rivals in the lucrative but highly competitive Chinese market, where it recently lost its crown as the country’s biggest smartphone manufacturer to Xiaomi, a fast-growing handset maker described as the “Apple of the East”.
“It appears that Samsung and Apple, the market leaders, made a strategic alliance as China’s Xiaomi is emerging as a formidable rival,” said Cho Chang-hoon, a business professor at Sogang University in Seoul.
In less than four years, Xiaomi has gone from obscurity to become the leading vendor in China, taking in 14 per cent of the world’s largest smartphone market during the second quarter thanks to its hi-tech but low-cost strategy, according to new data from the research firm Canalys.
Samsung, which had held the top spot since 2012, has slipped to second place and recently disappointed investors after posting its worst quarterly profit in two years as it vowed to revamp its mid-to-low end product line-up.
The company is also bracing itself for the launch of the iPhone 6 at the top end of the range, which is expected to be unveiled with much fanfare during an Apple media event next month.
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