Samsung Electronics saw more than $12 billion wiped off its market capitalisation today, the first trading day after a US court ordered it to pay $1.05 billion to Apple Inc. in a patent lawsuit.
Analysts believe that stock investors smell a market share rout for Samsung after a legal victory in the US gives Cupertino-based Apple Inc. an upper hand in the rivalry between the tech titans.
Shares in Samsung tumbled 7.5 per cent on Monday, wiping $12 billion off the South Korean giant’s market value. Samsung shares ended the day at 1.18 million won ($1,040), posting its biggest single-day percentage drop in nearly four years.
Monday's share price decline wiped 14 trillion won ($12.3 billion) off Samsung’s market capitalisation. Shares at one point fell by as much as 8 per cent to 1.173 million won.
Will Samsung go downhill from here? Make no mistake – the South Korean firm says it will contest the verdict and will continue to engage its arch-rival Apple in legal battles around the world. But with Apple drawing first blood – and making Samsung lose 7.5 per cent of its value in a single session – the battleground as it stands today seems to favour the US-based technology firm.
A ban may undermine Samsung’s grip on the $220-billion smartphone market, and set a precedent for rival handset makers that use Google’s Android operating system.
And while Samsung products that the US court found in infringement of Apple’s patents are all older mobile devices, if the patent verdict somehow spreads to the flagship Galaxy S III smartphone – a big, big ‘if’, mind you – analysts believe that will be quite a big setback for Samsung.
A judge scheduled a hearing next month to consider Apple’s request for a permanent US sales ban on devices such as the Galaxy S and S II smartphones and the Galaxy Tab 10.1 notebook.