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Apple Overstated Damages Claims, Says Financial Expert

With tensions running high in the courtroom where the world’s biggest mobile makers are engaged in one of the biggest legal cases between rivals, Samsung hit a strike at Apple when a financial analyst said that the iPhone-maker is overstating its claim for damages. Previously, before the declaration, the presiding judge told Apple’s lawyer, with the end of the high profile case nearing its end,  that it was not possible to call 75 witnesses to the stand “unless you’re smoking crack”.

Samsung’s own witnesses testified that its American rival should pay about $422 million for violating the Samsung patents in the US for its iPad and iPhone.

The case is a great eye-opener for the public wanting to know how Apple’s secretive workings in paying for patent royalties.

An accountant who testified for Samsung named Michael Wagner said that the South Korean company’s profits from the smartphones and tablets at the red dots of the case should be calculated somewhere about 12%, or $519 million.

Before Wagner testified, Apple’s witness, Terry Musika, said that the US margin of Samsung is close to 35.5% on sales beginning the middle of 2010 until March 2012. She also testified that the profits on revenues of Samsung at $8.16 billion was largely due to the company’s infringing acts on Apple products.

Wagner said that Musika did not take into consideration many of the costs Samsung has incurred including marketing. He also said that his 12% figure ranged from beginning of April 2011 for  many of the mobile products.

Before the case started, Apple claimed that it’s seeking a minimum of $2.5 billion in damages.

Both Apple and Samsung control more than half of the world’s smartphone sales. Apple is the undisputed leader in tablet sales, while Samsung is a distant second based on the figures from experts and documents released to the court by the defendant Samsung.

Apple said that its rival copied the design of  and a few features of its famous iPad and iPhone. Aside from monetary compensation, Apple is also asking the court to ban the sales of Samsung products targeted in the case.

For many observers, the legal wrangling in the courtroom is an interesting venue to look into the inner workings of both companies, especially Apple. More financial details were revealed about the famously secretive Apple last week. According to a Samsung expert Vince O’Brien, Apple has paid about $1.4 billion in patent royalties to 90 companies. It was also known that Apple has sole about $12.23 billion worth of iPhones in the US since September 2010, while the US sales for the iPad were at $2.29 billion as April 2011 was ending.

Some testimony last week focused on the issue about how much Apple will be paying Samsung if the jury finds that it violated Samsung’s patents. O’Brien said that a royalty fee for three of Samsung’s feature patents that include an efficient method to email a photo can be worth $22.8 million. Asked why the figure seemed not as significant, he said that there are still a number of many features in Apple’s phones.

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