Why Samsung Should Be Happy They Only Owe Apple $888 Million

A patent infringement lawsuit cost Samsung a lot, but they make more money than that each month selling phones
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Samsung didn't have a phone business to speak of when the iPhone was launched in 2007. Hell, they didn't have much of a phone business on the three-year anniversary of that launch in January of 2010. But in the summer of that year, they started releasing phones that looked—to Apple's lawyers at least—suspiciously like a certain Cupertino product. 

Apple sued for patent infringement and won. The most recent ruling today gave Apple $290 million in legal fees. That brings Samsung's total patent-infringement payout to $888 million. 

But hey, what a deal! 

By surfing behind Apple for a while before developing successful devices that looked less like iPhones, Samsung became the most important mobile device company not named Apple.

The magnitude of this success should not be underestimated. Below, we see a chart created by analyst Horace Dediu. It shows how much profit Samsung clears from "Telecom," which basically means phone sales. In the last quarter alone, they made more than 6 trillion won. That's billions of dollars.

Before the iPhone-like devices, their telecom business was an order of magnitude less profitable. 

Could they have done it without infringement? 

Maybe. But they didn't, at least according to the court.

And purely from a business perspective, you'd have to say that it all worked out anyway.

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Presented by

Alexis C. Madrigal

Alexis Madrigal is the deputy editor of TheAtlantic.com. He's the author of Powering the Dream: The History and Promise of Green Technology. More

The New York Observer has called Madrigal "for all intents and purposes, the perfect modern reporter." He co-founded Longshot magazine, a high-speed media experiment that garnered attention from The New York Times, The Wall Street Journal, and the BBC. While at Wired.com, he built Wired Science into one of the most popular blogs in the world. The site was nominated for best magazine blog by the MPA and best science website in the 2009 Webby Awards. He also co-founded Haiti ReWired, a groundbreaking community dedicated to the discussion of technology, infrastructure, and the future of Haiti.

He's spoken at Stanford, CalTech, Berkeley, SXSW, E3, and the National Renewable Energy Laboratory, and his writing was anthologized in Best Technology Writing 2010 (Yale University Press).

Madrigal is a visiting scholar at the University of California at Berkeley's Office for the History of Science and Technology. Born in Mexico City, he grew up in the exurbs north of Portland, Oregon, and now lives in Oakland.

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