Samsung sues Apple for infringement

Samsung Electronics has shot back with a tit-for-tat lawsuit against Apple, exactly a week after the US company sued South Korea's biggest company by sales for "slavishly" copying the iPad and iPhone.

In suits filed on Friday in South Korea, Japan and Germany, Samsung sued Apple for infringing 10 patents, in areas such as data transmission and wireless technology for connecting mobile phones with personal computers.

While they are competitors in smartphone handsets and tablets, Apple is also one of Samsung's biggest customers for key microchips that run the iPad and iPhone.

Some analysts have speculated Apple could look to diversify and use Taiwan's TSMC to supply chips for the iPad2, the second generation of the company's tablet computer. Still, they reckon that diversification is unlikely this year.

Apple also made 10 complaints against Samsung Electronics, but its case hinged more on design features, where technology experts say cases are harder to win outright. Samsung rejects assertions that its Galaxy smartphones have ripped off the iPhone and say the technology is home-grown.

Samsung has startled competitors with the speed with which its Galaxy smartphone, launched last June, has emerged as a serious rival to the iPhone. Samsung now commands 10% of the global smartphone market, from only 4% at the end of 2009.

Samsung officials admit that success has put strain on the relationship with Apple. While Samsung supplies many chips more cheaply to Apple than to its own mobile division, Apple fears its semiconductor orders could give Samsung excessive insight into its plans.

Samsung has engaged in active diplomacy to persuade Steve Jobs, Apple's chief executive, that Chinese walls are in place to stop details of Apple's chip needs reaching the mobile unit.

Chang Sea-jin, professor at the National University of Singapore and author of a book on Samsung, said such legal spats were common practice and would not damage the complex business relationship between Samsung and Apple.

"Apple is just sending a warning to Samsung that they are watching them for the future. In terms of the business, these are tiny jabs between two boxers," he said.

Mr Chang said Samsung was still producing core chips so efficiently that it was difficult for Apple to take its business elsewhere.

One Samsung official said the case could reflect internal politics at Apple, with the US management simply wanting to show it was doing something symbolic about the Korean competitor, now the biggest technology company in the world by sales.

Jeff Kang, analyst at Daishin securities, said the cases were "not serious", adding that: "My view is that Apple feels threatened by Samsung's rise."

Shares in Samsung dropped 2.59% to Won 904,000 on Friday in a flat market.

(Published by Financial Times - April 22, 2011)