Apple Inc. (AAPL) Faces A Serious Long-Term Threat From Samsung

apple samsungBrad Hoppmann:  Apple Inc. (NASDAQ:AAPL) vs Samsung may not be quite as dramatic as Godzilla vs Megalon, but it has the advantage of taking place in real life.

The two companies squared off in court again today as Apple (AAPL) pursued patent-infringement claims against its Korean smartphone rival.

I visited the flagship Apple store in New York this weekend. I have to say I was impressed. Everything about the place — its location in the heart of the city, the dramatic architecture and the products inside — made me think I was entering some kind of shrine or temple of the future. It was that dramatic.

Apple Store NYC

The way you walk down into the store from street level through large glass boxes was right out of an Isaac Asimov book. The store is totally secluded from the busy center of the Big Apple outside. The “Genius Bar” had the same long lines I’ve seen in other Apple stores, but there was still plenty of room to showcase all Apple’s products.

Ironically, I walked into this temple armed not with an iPhone, but a Samsung Galaxy Note 2. I even took a picture from my Samsung. Do you think Apple’s sensors detected a competitive product in the room?

The latest trial in a San Jose federal court is actually Round 2 of the big match. Apple won a previous trial about different devices, but the judge declined to bar Samsung from selling its devices in the U.S.

Will this time be any different? A judge and jury will make that decision — and it could have a huge impact on the technology sector as well as these two companies.

The first Apple-Samsung trial in 2012 ended with a partial Apple victory. Jurors agreed Samsung had copied six Apple patents and rejected all of Samsung’s counterclaims. The court ordered Samsung to pay Apple $1.05 billion in damages. Later rulings reduced the amount to $930 million.

In that case, the issues were mostly about the phone itself — shape, size, buttons, etc. Even though Apple won on the merits and may eventually receive monetary damages (Samsung has appealed), it will barely cover Apple’s legal bills. Patent litigation is astonishingly expensive.

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