For Samsung, It's Not The Money, It's The Opportunity Cost

I just read this article by Kevin Fitchard Samsung’s exposure: It can survive the Apple hit, where he states, “Samsung can easily absorb the $1 billion judgement if Friday’s jury award holds. With a $4.5 billion profit in the second quarter alone, Samsung has the cash to keep fighting.”

While it’s certainly true that Samsung can afford it, financially speaking, $1 billion is still a lot of money. Especially when you are competing in such a dynamic and fast paced industry. Not to mention, competing against Apple and their tremendous war chest of cash.

Let’s be clear, this is a huge blow for Samsung in terms of opportunity cost: what could that $1 billion have been used for instead? Well, R&D/new product development for starters, or distributed to share holders, or reinvested back into the company for a number of other use cases, and now that money is going to their biggest competitor.

It doesn’t matter how much money you make, you never want to have to give it up to a competitor.