SAN JOSE, Calif. (AP) — It was the $1 billion question
Saturday: What does Apple Inc.’s victory in an epic patent dispute over
its fiercest rival mean for the U.S. smartphone industry?
Analysts
from Wall Street to Hong Kong debated whether a jury’s decision that
Samsung Electronics Co. ripped off Apple technology would help Apple
corner the U.S. smartphone market over Android rivals, or amount to one
more step in a protracted legal battle over smartphone technology.
Many
analysts said the decision could spell danger for competitors who, like
Samsung, use Google Inc.’s Android operating system to power their
cellphones.
"I am sure this is going to put a damper on Android’s
growth," New York-based Isi Group analyst Brian Marshall said, "It hurts

the franchise."
The Silicon Valley jury found that some of
Samsung’s products illegally copied features and designs exclusive to
Apple’s iPhone and iPad. The verdict was narrowly tailored to only
Samsung, which sold more than 22 million smartphones and tablets that
Apple claimed used its technology, including the "bounce-back" feature
when a user scrolls to an end image, and the ability to zoom text with a
tap of a finger.
But most other Apple competitors have used the
Android system to produce similar technology, which could limit the
features offered on all non-Apple phones, analysts said.
"The other makers are now scrambling" to find alternatives, said Rob
Enderle, a leading technology analyst based in San Jose.
Seo
Won-seok, a Seoul-based analyst at Korea Investment said that the
popular zooming and bounce-back functions the jury said Samsung stole
from Apple will be hard to replicate.
The companies could opt to
pay Apple licensing fees for access to the technology or develop smarter
technology to create similar features that don’t violate the patent —
at a cost likely to be passed onto consumers.
Apple lawyers are
planning to ask that the two dozen Samsung devices found to have
infringed its patents be barred from the U.S. market. Most of those
devices are "legacy" products with almost nonexistent new sales in the
United States.
Apple lawyers will also ask that the judge triple the
damage award to $3 billion since the jury found Samsung "willfully"
copied Apple’s patents.
A loss to the Android-based market would
represent a big hit for Google as well. Google relies on Android devices
to drive mobile traffic to its search engine, which in turn generates
increased advertising revenue. Android is becoming increasingly more
important to Google’s bottom line because Apple is phasing out reliance
on Google services such as YouTube and mapping as built-in features on
the iPhone and iPad.
Some experts cautioned that the decision
might not be final, noting the California lawsuit is one of nine similar
legal actions across the globe between the two leading smartphone
makers.
Samsung has vowed to appeal the verdict all the way to the
U.S. Supreme Court, arguing that Apple’s patents for such "obvious"
things as rounded rectangle were wrongly granted. A Sept. 20 hearing is
scheduled.
The $1 billion represents about 1.5 percent of
Samsung’s annual revenue. Jerome Schaufield, a technology professor at
the Worcester Polytechnic Institute said the verdict wouldn’t upend a
multibillion-dollar global industry.
"Samsung is powerful," Schaufield said. "The company will regroup and
go on."
Samsung engineers have already been designing around the disputed patent since last
year.
"We
should never count out Samsung’s flexibility and nimbleness," said Mark
Newman, a Hong Kong-based analyst with Sanford C. Bernstein. "This is
merely an embarrassment and annoyance to the company that they will have
to find ways around."
The dispute centers on Apple’s
dissatisfaction with Google’s entry into the phone market when the
search company released its Android operating system and announced any
company could use it free of cost.
Google entered the market while
its then-CEO Eric Schmidt was on Apple’s board, infuriating Apple
co-founder Steve Jobs, who considered Android to be a blatant rip-off of
the iPhone’s innovations. Apple filed its patent infringement lawsuit
in April 2011, engaging the country’s highest-paid patent lawyers to
demand $2.5 billion.
The verdict didn’t faze some iPhone users, who said that they already know Apple
phones are superior.
The
rivals are "modeling phones based on what they see with the iPhone,"
said David Green of Wareham, Mass., finishing a call on his iPhone while
waiting to catch a train.
He switched to Apple from a BlackBerry
about a year ago, after becoming disenchanted with the reliability and
technological features of non-Apple smartphones.
"When I got the iPhone, it worked so well that I told my friends, ‘Now I have a
REAL smartphone,’" Green said.
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Associated Press writers Youkyung Lee in Seoul, South Korea, and Mark Jewell in
Boston contributed to this report.
Copyright 2012 The Associated Press.