Samsung EU Tablet Ban Another Win for Apple

+4.27%
Upside
171
Market
178
Trefis
AAPL: Apple logo
AAPL
Apple
Samsung Tablet

Source: Wikipedia

Recently Apple (NASDAQ:AAPL) won a German court ruling to block Samsung’s “Galaxy Tab” tablet in most of European Union (except the Netherlands). [1] It is the second victory for Apple in the last few weeks after Samsung agreed to delay the launch of the device in Australia because of Apple’s litigation. Samsung is the second largest player in the tablet market after Apple and the leading manufacturer running Google (NASDAQ:GOOG) Android operating system. There are other smaller players like ASUS, Toshiba, Acer, HTC that run Android OS for tablets and competes with Apple but none as big as Samsung.

We believe that this ruling provides Apple a chance to widen the competitive gap and further consolidate its position in the tablet market. A few days back we did a note titled Why Apple Still Dominates Tablets in which we analyzed why Apple dominates the tablet market and could continue to do so for the next 1-2 years.

The iPad now accounts for around 12% of our $510 price estimate for Apple stock, which is about 40% above the market price.

Samsung’s Loss is Apple’s Gain

Apple sold around 9.25 million iPads in the last quarter and has sold around 14 million iPads in the first half of 2011. [2] However, Samsung whose market share was just under 8% in 2010 grew rapidly in 2011 and has sold an estimated 7.5 million tablets in the first half of this year. [3] [1] This implies that Samsung is rapidly taking market share in the still nascent tablet industry.

Relevant Articles
  1. Down 10% This Year, Will Gen AI Tools Help Apple Stock Recover?
  2. Down 5% Over The Last Month, Will Strong iPhone Sales Help Apple Offset Mac Headwinds In Q1?
  3. After Over A 40% Rally In 2023, Will Antitrust And iPhone Issues Hurt Apple Stock?
  4. Up 45% Since The Beginning Of 2023, Where Is Apple Stock Headed?
  5. Up 34% This Year, Will Apple Stock Rally Further Following Q4 Results?
  6. Will New iPhones Help Apple Stock Offset A China Slump?

Samsung’s rapid rise threatens Apple’s dominance in the tablet market though after this court ruling, Apple can breather a little easier … for the time being. Depending on the extent of the ban, Apple’s market share in the second half of 2011 should improve over the first half though the flurry of tablet launches expected later this year and next promises to change the spice up the competitive landscape going forward.

See our complete analysis for Apple stock here

Notes:
  1. Apple blocks Samsung’s Galaxy tablet in EU, Reuters, August 10th, 2011 [] []
  2. Data available in Apple SEC filings []
  3. Samsung’s 2010 tablet market share, BGR quoting ABI Research as the source, April 20th, 2011 []