Samsung Electronics Co Ltd (KRX: 005930) and Apple Inc (NASDAQ: AAPL) have agreed to end patent lawsuits outside the United States, Reuters reported Wednesday, citing a Samsung spokesman.
"This agreement does not involve any licensing arrangements, and the companies are continuing to pursue the existing cases in U.S. courts," Reuters cited the spokesman as saying.
Apple and Samsung have been litigating around the world for three years, each accusing the other of infringing patents in making smartphones and other mobile devices. The lawsuits in the U.S. have resulted in a $1 billion fine against Samsung and some smaller penalties against both companies.
“One way to look at it is, the smartphone market in the U.S. is saturated,” Jayanth Kolla, partner at Convergence Catalyst, an advisory firm in India, told International Business Times. “Apple is the dominant player in the U.S. and it knows that the future growth for its iPhones has to primarily come from outside the U.S., where currently Samsung is the dominant player.”
This agreement helps make it a little easier for Apple to go after markets outside the U.S., which are becoming more important, Kolla said, in a phone interview Wednesday.
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For Samsung, “It makes sense for them to take a step back right now because they’re being viewed as having lost the innovation edge ... their last two flagship phones including the S5 have hardly made a dent and their entire market share in each of their individual strong markets is under threat,” he said.
In China, Samsung has lost market leadership to Xiaomi and, in India, they are under severe threat from local players such as Micromax Informatics Ltd. Micromax has surpassed Samsung as the largest mobile-phone company in India in terms of units sold, according to recent figures from market research firm Counterpoint Technology.
During the April-June quarter, Micromax took 17 percent of the Indian mobile-phone market share versus Samsung's 14 percent. But, the Korean company managed to hold on to its lead in the smartphone segment.
The agreement to end patent lawsuits outside the U.S. affects pending litigation in Australia, Germany, France, Italy, Japan, the Netherlands, South Korea and Britain, The Verge reported Tuesday.