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Mobile Communications

Hannah Bae (South Korea) - Apple and Samsung

It's Complicated: The Relationship Between Apple and Samsung

On a recent taxi ride here in Korea, the driver struck up an interesting conversation with my friends and me when he realized that some of us in the cab were American.

"Apple is bad for Korea," he said, referring to the fierce, months-long patents battle that the U.S. firm has waged with its Korean competitor Samsung in courts around the world.

"But sir," one friend replied, "Apple's also been really good for Korea. So many Koreans use the iPhone. And without the iPhone, Samsung would never have made its smartphones, either, and they've made a lot of money off those."

To that, the cab driver simply muttered, "You just don't understand."

Conflicting feelings aside, it really is quite difficult to understand the implications of the litigious relations between the two IT powerhouses.

In April, Apple's claim that Samsung "slavishly" copied its iPhone and iPad set off a legal dispute that has mushroomed into 30 cases in 12 countries when you include Samsung's countersuits. So far, Apple has succeeded in banning sales of Samsung Galaxy devices that run on Android in Australia, Germany and the Netherlands.

Initially when the lawsuits began, Samsung stayed relatively quiet. That's because Apple is a very important customer for Samsung: It's the Korean firm's largest client for semiconductors, which are essential components for its mobile devices.

But the legal battle has since heated up, with Samsung asking judges in seven countries -- including Japan, Australia, France and Italy -- to block sales of Apple's new iPhone 4S.

On Oct. 19, Samsung's president for mobile communications business J.K. Shin said in the face of several legal losses that his company is going to start playing hardball. Their next move will be to hire more lawyers for an added boost. "This is only the beginning," he told reporters at a launch event for Samsung's latest Galaxy Nexus smartphone.

Interestingly enough, the Galaxy Nexus has been designed to avoid that kind of legal action, using none of Apple's known patents, Shin said. There's no absolute guarantee that the Galaxy Nexus is completely immune from Apple litigation, especially due to the convoluted nature of software patents, but judging by Shin's statements, Samsung has tried its best to steer clear.

Meanwhile, another Samsung executive has been hard at work smoothing over relations with Apple at the very top. On a recent trip to the Bay Area, Samsung scion Jay Y. Lee, who is also the company's chief operating officer, not only attended the memorial service for the late Apple founder Steve Jobs, but also met with Jobs' successor, Tim Cook.

The result? According to local media reports, the two sides played nice, discussing their continued "good relations." In addition, Lee said his company will keep supplying components and chips to Apple until 2012, with talk of extending the deal through 2013-14.

According to the Wall Street Journal, Samsung doesn't appear to be in any actual danger as a parts supplier for Apple, as the U.S. giant doesn't exactly have many other options. However, local media had pointed to Taiwanese and Japanese competitors, including Toshiba, whose devices had been present in previous iPhone and iPad models.

At this point, Samsung appears to be secure enough as a maker of both parts and end products. A breakdown of the iPhone 4S showed Apple is still putting Samsung's chips to good use in its latest models. And just a week and a half ago, Shin of Samsung announced that his company had surpassed Apple in third-quarter smartphone sales at 20 million handsets versus Apple's 17 million.

 

By Hannah Bae, an American journalist based in Seoul. A former intern at the John S. and James L. Knight Foundation, she is a tech enthusiast. You can follow her on Twitter at @hanbae.

 

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