Analyzing the Role of Apple-Samsung Lawsuits on Pricing and Marketing Strategies of the Two Companies

The purpose of this research was to analyze the effects of Apple-Samsung lawsuits on the two companies’ pricing and marketing strategies. This study was practical in nature and was considered a descriptive case-study research. To this end, legal cases between the two companies during 2011-2018 were investigated, and more specifically, 13 of them with public access during 2011-2012 were scrutinized. Furthermore, historical data of the two companies’ product prices and smartphone market penetration in the United States and other countries in the dispute were extracted. The main focus of this research was on utilizing the game theory concepts for modeling the litigations. First, a game of ‘building a case against the competitor’ was identified followed by another game of ‘infringing or not infringing the competitor’s patent(s)’. It has been shown that the latter was the source of another infinite recurring sequence of games that, according to the Forgiving Trigger Strategy, has led to the desired outcome for both companies. Perusing the financial outcomes of the lawsuits and heeding the fact that net profits of the two companies were negligible, other factors were identified including an increase in the market share and the prevention of price-wars over the creation of these lawsuits. In this regard, the goal of the two companies was to increase the customer lifetime value. Also, the reasons for stopping further prosecutions by the two companies were studied, and the question of why Apple never engaged in a direct legal dispute with Google itself– the creator of the Android operating system– was analyzed. Finally, some predictions were made about the likelihood of new patent wars.