Apple Inc. (NASDAQ:AAPL) has lost its first case against Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930), and as a result, some of its older devices may be banned from import. However, well-known Apple guru and Piper Jaffray analyst Gene Munster believes the effect on the company will be limited.
Details On Samsung’s Win Over Apple
Tuesday’s win was the first for Apple against Samsung, Bloomberg’s Susan Decker reported. The two companies have been battling over patents in courts all over the world, with each company attempting to get the other company’s devices banned in one or more countries.
The decision was handed down by the U.S. International Trade Commission, which posted the details on Tuesday. The ITC’s ruling states that Apple Inc. (NASDAQ:AAPL) was in violation of a patent owned by Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) which is used to send data over AT&T wireless networks.
It covers only older devices like the iPhone 4 and the iPad 2 3G sold on the AT&T Inc. (NYSE:T) and T MOBILE US INC (NYSE:TMUS) networks, as well as on regional carriers CT Cube LP and General Communication, Inc. (NASDAQ:GNCMA). The iPhone 3GS, the iPhone 3 and the iPad 3 are also covered under the ban, although the iPhone 4 is the only one on the list which has measurable sales, according to Munster.
The ITC’s ban on these device imports must still be reviewed by President Obama, who can choose to overturn it, although this doesn’t happen very often. During the 60 days President Obama has to review the case, Apple Inc. (NASDAQ:AAPL) is allowed to continue selling the devices. Also Apple Inc. (NASDAQ:AAPL) will likely appeal the decision and discount the iPhone 4 even further in September when Munster expects the iPhone 5S to be released.
Expectations For The Win’s Effect On Apple
Apple Inc. (NASDAQ:AAPL) guru Gene Munster released a note this morning with his take on the company’s legal loss to Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930). In his view, Apple Inc. (NASDAQ:AAPL)’s revenue will be negatively impacted by up to 1 percent in the June and September quarter.
Munster estimates that AT&T Inc. (NYSE:T) made up about 15 percent of iPhone sales over the last two quarters and about 8 percent of total sales. He believes that the iPhone 4 on the AT&T network accounts for about 2 percent of Apple Inc. (NASDAQ:AAPL)’s overall sales.
Assuming the same percentages over the next two quarters and that 25 percent of the iPhone sold will be the iPhone 4, he gives the overall revenue impact of the loss of the iPhone 4 on AT&T to be around $680 million in revenue. Munster also points out that the actual impact may be even less because the iPhone 4S will still be available and because the iPhone 4 will probably be retired in September when the next generation model comes out.
He doesn’t believe any future Apple Inc. (NASDAQ:AAPL) products will be banned, so he maintained his overweight rating on the stock “based on a favorable shift in new products” coming out over the next 18 months.