Back during the summer the newest legal battles involving Samsung started to arise, as Microsoft began the process to take Samsung to court over the issue of not paying royalty fees to the company due to licensing. Samsung proclaimed that they didn’t owe any money for licensing fees over those patents that Microsoft owned which Microsoft felt was not OK. The original filing of the lawsuit appeared in early 2014, as Microsoft was seeking a payment for the nearly $6.9 million in interest on those royalties that Samsung apparently still hadn’t paid, as they had allegedly stopped paying Microsoft for licensing fees since September of last year. The interest was part of a massive $1 Billion collaboration deal between Samsung and Microsoft as part of Samsung’s manufacturing Windows phones, and those court battles are starting to gain momentum as both Samsung and Microsoft have filed counterclaims to each others original filings on the lawsuit.
Today, Reuters reports that Samsung has recently filed a counterclaim basically asking the court for a declaration to terminate the agreement between them and Microsoft over licensing fees and the alleged interest amount that is still owed. Samsung’s argument is that once Microsoft had acquired Nokia’s hardware business and a large number of their patents, they became a direct competitor to Samsung in the hardware sector, something that wasn’t previously the case since Microsoft wasn’t actually manufacturing their own hardware. Because of the Nokia acquisition, Samsung claims that continuing to share sensitive information with Microsoft as part of the original agreement would have created issues with U.S. anti-trust laws and Samsung is weary of any continuity of the agreement for fear of being slapped with collusion charges.
Microsoft has also filed their own counterclaim with an amended complaint of the original suit filing, stating that regardless of their acquiring Nokia’s hardware division, Samsung should now be allowed to “unilaterally kill” the patent-licensing agreement between the two of them. Gaining the ability and rights from the courts decision to stop the agreement if they so chose could gain Samsung more authority in the matter between them and Microsoft and allow for them to renegotiate terms. Microsoft states however that despite Samsung’s arguments, they feel they have a really strong case.
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Chinese smartphone maker Xiaomi’s market share rose in the third quarter, while market leaders Samsung and Apple lost ground. BLOOMBERG NEWS
The erosion of Samsung Electronics Co.’s and Apple Inc. ’s dominance of the global smartphone market accelerated during the third quarter, as Chinese makers of low-cost phones continued to undercut the industry leaders, according to data from three market-share trackers released Thursday.
Samsung, the world’s largest smartphone maker by shipments, saw its market share fall to 24.7% from 35% during the three months ended Sept. 30, its steepest decline since it became the industry leader in the third quarter of 2011, according to data provider Strategy Analytics. Upstart Chinese phone maker Xiaomi Inc. rose to third place with a 5.6% share, up from 2.1%, as its global handset shipments more than tripled.
Apple remained No. 2, with a 12.3% share, but its market share fell from 13.4% as supply problems held back the shipment of its latest-model iPhones, which went on sale in mid-September.
Market-share data released by IDC and Counterpoint Research Thursday showed similar results.
The latest data came after Samsung posted Thursday a sharply lower third-quarter net profit as intensified competition from Chinese smartphone makers hurt the South Korean technology giant’s mobile business.
Linda Sui of Strategy Analytics estimated that Xiaomi was the fourth-most profitable handset maker in the third quarter, trailing Apple, Samsung and LG Electronics Inc. Xiaomi’s preference for low-cost online distribution channels instead of bricks-and-mortar shops helped its profitability, she said.
Xiaomi, which means “Little Rice” in Chinese, is known for its marketing savvy. The Beijing-based smartphone maker, founded in 2010, has been growing quickly across Asia by selling low-cost handsets that don’t skimp on features, and has created a cultlike fan base among early adopters of new gadgets.
The company has also used social media in growing its popularity. Chairman Lei Jun, who has often been compared with Apple’s late founder Steve Jobs for his presentation style at product launches, has more than 11 million followers on China’s Twitter -like platform, Sina Weibo .
Looking to expand its business overseas, Xiaomi last year hired Hugo Barra, who was an executive at Google ’s Android business. The company has expanded into Taiwan, Hong Kong, Singapore, Malaysia and India.
During the second quarter, Xiaomi overtook Samsung as the top smartphone maker in China, the world’s largest smartphone market by shipments, according to market research firm Canalys.
Xiaomi has been expanding into other markets outside China, including Singapore, Malaysia, India and Indonesia and has been borrowing money to fund the expansion.
But industry observers say that despite Xiaomi’s popularity on its home turf, it will face challenges getting consumers familiar with its brand overseas, where it remains relatively unknown.
Lenovo Group Ltd. and Huawei Technologies Co., meanwhile, have been expanding aggressively outside China. Lenovo’s smartphone sales have been growing fast in Southeast Asia and Eastern Europe, while Huawei has been increasing its presence in the Middle East and Africa as well as Latin America. In emerging markets, both Huawei and Lenovo are challenging Samsung’s dominance by selling inexpensive models with competitive technological features.
IDC said Samsung’s third-quarter market share dropped 8.7 percentage points to 23.8% as its shipments fell 8.2% from a year earlier. Apple’s market share fell to 12% from 12.9%, while Xiaomi came in third with a market share of 5.3%, up from 2.1% a year earlier. Lenovo ranked fourth with a market share of 5.2%, up from 4.7%, followed by LG’s 5.1%.
Lenovo’s market share is expected to rise after it completes the acquisition of U.S. handset maker Motorola Mobility later this year.
Counterpoint analyst Neil Shah said Samsung has been losing market share at every price point: in the premium segment to Apple; in the middle tier to Xiaomi, and Huawei; and in the bottom tier to Lenovo and a number of local brands such as Micromax in India and Mito in Indonesia.