Samsung’s loss to Apple in court on Friday, Aug. 24, has had an immediate impact on the business, as the company saw its shares fall 7.5% on Korean trading, reported AP—while Apple shares were up $14.25, or 2.1% this afternoon on Nasdaq.
However, it’s not like Samsung will be unable to pay the $1.05 billion judgment jurors in San Jose, Calif., awarded to Apple, either (Samsung has stated it will appeal the verdict). The Wall Street Journal reports that Samsung has about $17 billion in operating profit since it started selling the devices that Apple contended violated its patents. Samsung also has $21 billion in cash holdings.
What might hurt Samsung more in the long run is damage to brand value and reputation. Will the public—particularly in the U.S.—look at Samsung as a cheater and a copycat from now on? Gene Grabowski, EVP at Levick, doesn’t think so. In fact, he says Samsung has a great opportunity to play the underdog, David vs. Goliath role—a strategy that could just work. “Samsung can be the consumer-friendly company, while Apple is now cast as the monopolist,” says Grabowski. This is quite a turnaround from upstart Apple going up against big bad Microsoft and the PC world years ago.
An internal Samsung memo to employees leaked today reveals the company’s messaging strategy going forward: "History has shown there has yet to be a company that has won the hearts and minds of consumers and achieved continuous growth, when its primary means to competition has been the outright abuse of patent law, not the pursuit of innovation," Samsung wrote to employees.
Innovation is a card Samsung can play, says Grawbowski, as just the Galaxy S I and S II smartphones were affected by the court verdict. New products expected later this year, such as the Galaxy S III and the next version of the Galaxy Note (which sold more than 10 million units in less than a year), aren’t affected as yet, so Samsung can play up the innovative aspects of those products.
So despite the drop in stock, perhaps all is not lost for Samsung. In fact, if it plays its PR just right, the company could make those losses back—and more.
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