Samsung Electronics and Apple said they had agreed to drop all patent litigation outside the United States, scaling down a protracted legal battle between the smartphone rivals.

The iPhone and Galaxy handset makers issued nearly identical statements announcing the global ceasefire while vowing to pursue ongoing litigation in the United States, which analysts say involves much bigger amounts of potential damages.

The stand-down is likely to enable Samsung Electronics, the world’s top smartphone maker, to shift its focus to its Chinese rivals such as Xiaomi rather than fighting a costly and prolonged legal war with Apple around the world, analysts said.

“It appears that Samsung and Apple, the market leaders, made a strategic alliance as China’s Xiaomi is emerging as a formidable rival,” said Cho Chang-hoon, a business professor at Sogang University in Seoul.

Last week, Samsung Electronics posted its weakest earnings since the second quarter of 2012, partly hit by rising competition from Chinese smartphone makers.

Xiaomi took China’s smartphone crown in the second quarter after replacing Samsung Electronics as China’s largest smartphone vendor, data from Canalys shows.

The legal battle between Samsung Electronics and Apple began in the United States in 2011 when Apple first filed a suit alleging that Samsung “slavishly” copied elements of its iPhones, the device which launched the industry.

Days after the initial Apple suit was launched in the United States, Samsung Electronics sued its Cupertino, California-based rival in South Korea, Japan and Germany, kicking off a series of tit-for-tat cases that spread around the world.

The latest agreement ends patent disputes in Australia, France, Germany, Italy, Japan, the Netherlands, South Korea, Spain and the United Kingdom, countries where the smartphone market leaders had engaged armies of lawyers for what analysts said were questionable gains.

The South Korean and US tech giants declined to disclose the terms of the deal, but said it did not involve “any licensing arrangements and the companies are continuing to pursue the existing cases in U.S. courts.”

The litigation raged on even as business flourished between the two companies, with Apple depending heavily on Samsung Electronics for components such as chips and liquid crystal displays.

Apple and Samsung Electronics together dominate the global smartphone market with a combined market share of 37.1 percent in the second quarter, according to Strategy Analytics.

"They now see little need to wage a war around the world, which will only fatten the bills of lawyers," said Young Park, a Hyundai Securities technology analyst in Hong Kong, adding that the deal raised the possibility of a final licence agreement settling how the companies use each other's patented technology.

He and three other analysts whom Reuters talked to said they do not have estimates for the legal costs that Samsung Electronics and Apple are facing.

A Samsung Electronics spokeswoman declined to comment.

Reuters