Copy that: Apple's $1bn fine wipes $12bn off Samsung's market cap

Will Samsung go downhill from here? South Korean firm says it will fight back

By
  • Vicky Kapur
Published

A South Korea shop manager shows Samsung Electronics' Galaxy S mobile phone (R) and Apple's iPhone 3G at a shop in Seoul on July 27, 2010. Apple won more than $1 billion in a massive US court victory over Samsung on August 24 2012 in one of the biggest patent cases in decades -- a verdict that could have huge market repercussions. (AFP)

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.

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Comments

  • Soggy 15 September 2012 03:48 0 0
    I agree, I own an IPhone 4 and think the 5 is going to be rubbish. Apple is only playing its cards on its ability to be trendy in this market. As far as innovation and design, Im setting my sights on the Samsung Galaxy Note 2 and trashing any thoughts of Apple products in the future.
  • Kevin 28 August 2012 11:03 0 0
    @Jazz, the UI you mention was included in this lawsuit. And it's Google that designed the 'copied' UI NOT Samsung as those are features of the Android OS. That in itself should void the case but the final decision was obviously very biased and also Samsung is a much bigger company hence a better target. However, a fair lawsuit would be between Apple and Google.
  • Jazz 28 August 2012 10:31 0 0
    Rounded Corners was one of the Patents that was in discussion, Actully Apple should have sued Andriod for coping the UI from Apple. The same Icon shapes and rubber slide down animation, Microsoft is safe with it's innovated design and live tiles system, Now thats innovation.
  • Kevin 28 August 2012 09:58 1 0
    The first iPhone's design was copied from the LG Prada that came out months earlier. To patent a rounded rectangle shape and icon grid is just pathetic as Apple NEVER invented any of that. Android devices are far too superior to suffer any downhill. Just recently, the US Army have deployed Android phones for their soldiers instead of Apple. Some of the iPhone's parts are made by Samsung. Clearly, Apple are threatened by Samsung's superior phones so had sued them on something as silly as looks.
  • mo 27 August 2012 21:47 0 0
    typical west, they want everything and envious of east successes, what you expect from American courts, of course it is biased towrads Apple
  • Parvaiz 27 August 2012 14:35 1 0
    Greedy apple on same downhill road as microsoft ,learn from history unless your completly blinded by money.

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