Matt Macari of The Verge reports that, although the jury found that 28 Samsung products had infringed on Apple copyrights, Apple filed an injunction against 8 these Samsung smartphones, available in the U.S. The injunction hearing for the eight smartphones was slated for September 20th, but Judge Lucy Koh, who has been presiding over the Apple vs. Samsung patent infringement case, has moved the hearing from Sept. 20 to Dec. 6. Three of the eight were not judged to have infringed on utility, but design and “trade dress.” There is a preliminary injunction on Samsung’s Galaxy Tab 10.1 in force, though the jury did not hold up Apple’s infringement claims on that product. The 8 phones that Samsung seeks to ban U.S. sales of are:
  • Galaxy S 4G
  • Galaxy S2 (AT&T)
  • Galaxy S2 (Skyrocket)
  • Galaxy S2 (T-Mobile)
  • Galaxy S2 Epic 4G
  • Galaxy S Showcase
  • Droid Charge
  • Galaxy Prevail

Not A Hard Hit to Samsung?

Forbes contributor Nigam Arora, believes the ban itself is just for show and less significant than it may seem.

First, Apple is not seeking a ban on all of the devices involved in the trial, perhaps becaue some of the devices are now obsolete, not being sold in the United States, or have very low sales.

Second, even if Apple is successful in receiving a preliminary injunction against Galaxy S II, chances are Samsung will lower prices of Galaxy S II devices to clear inventory before the ban goes into effect. Meanwhile, Samsung’s flagship  Galaxy S III is not on the list.  If Samsung comes up with new incentives to capture budget conscious buyers who would have chosen Galaxy S II, Apple may end up helping Samsung in the short run.

A Windfall for Apple

While the ban may be meaningless in the short term, Apple may still realize great benefits from the verdict, as Nigam Arora calculates that the decision will be worth $450 Billion to Apple. He explains the calculation in Why I Think Apple’s $1 Billion Jury Award May Really Be Worth $450 Billion. He believes that the verdict is economically significant for Apple for 6 reasons:

1. Hurting Google: $200 Billion

The verdict’s result should be higher costs for phone manufacturers who use Google Android and slowdown of the rapid expansion of Android Juggernaut, which Nigam estimates to be worth $150 billion to $200 billion to Apple over the next 10 years.

2. Enhancing Sales Overseas

Apple products have become status symbols especially in emerging markets such as India and China, and the newly rich in these countries who need to display the fact that they have arrived will tend to buy Apple products to do so. The difference from the western world is that in China and India there are a lot more newly rich than in the western world.

3. Strengthening Apple’s Brand Image: $100 Billion

Nigam estimates that the strengthening of Apple’s brand image could be worth about $100 billion over the next 10 years.

4. Winning Over Aspirational Buyers: $150 Billion

Aspirational buyers who previously had to stretch to buy Apple products and have settled to buy products from competitors that looked similar to Apple products may find that the verdict will make it more difficult for competitors to copy the look and feel of Apple products.  If aspirational buyers stretch farther to buy Apple products, Nigam’s estimate is that this will contribute about $150 billion to Apple’s sales over the next 10 years.

5. Wavering Buyers: $100 Billion

A stronger brand image for Apple and higher competitor costs with less copying of the look and feel of Apple products should help Apple capture more of the buyers who waver between Apple products and competing products. He estimates that this could add about $100 billion to Apple sales over the next 10 years.

6. Decreased Defection: $100 Billion

The jury found that the Galaxy Tab infringed Apple’s patent that controls the behavior at the end of the screen, which makes Apple users less likely to defect to competitors, which could add about $75 billion to $100 billion to Apple sales over the next 10 years.

Adjusting for Overlap: Final Windfall = $450 billion

Some Apple customers will fall into more than one of the categories described above, resulting in a certain overlap in the estimates above.  Estimating overlap at around $200 billion and subtracting this from the total estimate of $650 billion, leaves a a net gain over 10 years of about $450 billion.

Nigam Arora founded two Inc. 500 companies, and has been involved in over 50 entrepreneurial ventures. He am the chief investment officer at The Arora Report, which publishes four newsletters to help investors profit from change. You can follow him here.

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