One of Samsung's witnesses today called into question the veracity of Apple's damages report, testifying that Cupertino's expert hadn't factored in Samsung's total costs in making and selling its products. Michael Wagner explained to the jury that Apple's damages analysis, which was provided by Terry Musika, listed Samsung's total profits for the accused devices as $2.241 billion. The analysis didn't incorporate all of the costs involved with the research, development, and promotion connected with the devices, he said; by his estimates, Samsung's true profit was just $519 million.
Wagner also disputed Apple's own lost profit claims (Musika said Apple lost 2 million iPhone and iPad sales, at an estimated cost of $488.8 million). According to Wagner, Musika reached the number by assuming that Samsung would simply pull any infringing products from the marketplace, when in reality the company could design around utility patent infringements with software updates. Design patents, he said, could be addressed with replacement hardware, putting viable alternatives on the market that consumers could choose over the iPhone.
Calling back to Apple's own Android buyer survey, Wagner pointed out that just 25% of Android buyers had considered the iPhone in the first place. Combined with the production problems Apple had with the iPhone 4, he said, Apple simply wouldn't have been able to sell as many devices as it is claiming.
Wagner then accused Apple of artificially inflating the revenue it would have generated by using the worldwide average iPhone price to calculate lost profits rather than the US average (the case only pertains to sales in the United States). There was also the issue of price factoring into purchase decisions. A 2011 report revealed that the average iPhone buyer paid $67 more than the average Samsung smartphone buyer. "He did not consider that fact," Wagner said.
During Apple's cross-examination, Wagner admitted the he had difficulties obtaining complete and accurate financial data from Samsung — an issue Apple has raised as well — but things quickly became heated between the witness and Apple attorney Michael Jacobs. Wagner accused Apple of making continual errors in its calculations. "Do it right," he said, and I'll agree with your numbers.
Jacobs managed to slip one more Samsung email into evidence — this one referencing AT&T's concerns about the "cartoonish" nature of Samsung's icons — which mentioned the iPhone as a design reference point. It wasn't as incriminating as some of the other emails we've seen, but it's clear Apple is going to continue to put as many documents of this sort in front of the jury as possible until the very last moment.