On August 24 after market close, the jury in the Samsung vs. Apple patent case delivered a solid victory for Apple Inc. (NASDAQ:AAPL) and a bitter defeat for Samsung. This follows a South Korea court ruling that stated both companies infringed on each other’s patents. Samsung has said that it will appeal the verdict and that the verdict will have no impact on new product introductions.
There will be a hearing on September 20 at which the judge could impose injunctions on any or all of the 28 Samsung products in the suit and prevent their sale in the U.S. The judge had already imposed a preliminary injunction on the Galaxy Tab 10.1 and the Nexus. However, Apple Inc. (NASDAQ:AAPL) seeks to ban Samsung from sales of 8 smartphones. According to the research report of Cantor Fitzgerald, the most likely outcome will be a permanent injunction on most, if not all, of the Samsung products, with an order from the Court of Appeals staying the injunction. Cantor Fitzgerald also believe there is a reasonable chance of the verdict being overturned on appeal.
Apple Inc. (NASDAQ:AAPL) is engaged in lawsuits against Samsung and other mobile device manufacturers around the world. It is not clear how the U.S. case will affect these other cases. Legal cases (particularly patent cases) are notoriously difficult to handicap, and Cantor Fitzgerald have generally expected that most cases will end up in global settlements and cross-licensing agreements. Apple is clearly not interested in settlements, and this looks to be a long and frustrating battle for consumers.
According to report, in the near term, Cantor Fitzgerald do not expect any change in the outlook for suppliers to the mobile device manufacturers. While there could be some dislocations, depending on the outcome of the September 20 court date, they believe that most device manufacturers (including Samsung) have adjusted their new releases (or they will adjust them) to avoid further legal problems. However, Cantor Fitzgerald expect that investors will be skeptical and probably overweight Apple suppliers and underweight Samsung suppliers. The Firm provide the following list of the covered companies and their approximately exposure to Apple and Samsung.
- Skyworks: Apple 12-18%, Samsung 12-18%
- RF Microdevices: Apple less than 4%, Samsung 25%
- TriQuint: Apple 35%, Samsung 8-9%
- Qualcomm: Apple 10-15%, Samsung 10-15%
- Broadcom: Apple 10-15%, Samsung 10-15%
Summarized Background:
In April 2011, Apple Inc. (NASDAQ:AAPL) filed suit against Samsung in U.S. Federal Court claiming that 28 Samsung products violated at least one of seven different patents. Samsung filed a counter suit claiming that many of the Apple patents were invalid and that the Apple iPhone, iPad, and iTouch violated at least one of five different patents owned by Samsung.
