Samsung could plan out an aggressive legal strategy to block sales of the soon to be announced Apple (NASDAQ:AAPL) iPhone 5 when it eventually arrives in Korea. [1] The Korean giant may seek an injunction request on Apple’s new iPhone in Europe as well. [2] This suggests that the intensifying turf war among these players continues, and if Samsung manages to win an injunction against the iPhone 5, it could have large lead to more intense legal attacks from Apple as the iPhone is the key driver to Apple’s business. This could have implications beyond Samsung including players like Research in Motion (NASDAQ:RIMM) and Nokia (NYSE:NOK) that will be impacted by the iPhone.
Intensifying Legal Battles
Samsung’s legal strategy against Apple is the result of what Apple is doing to Samsung in several markets. It all started in April this year when Apple sued Samsung claiming its Galaxy cellphones and tablet “slavishly” copied Apple’s iPhone and iPad. [3]
Apple then successfully won a German court ruling to block Samsung’s “Galaxy Tab” tablet in Germany (see Samsung EU Tablet Ban Another Win for Apple). As a result, Samsung had to pull out its new tablet Galaxy Tab 7.7 from Europe’s biggest consumer electronics fair, IFA Berlin (see Apple Gets Breathing Room After Samsung Tablet Pulled from Electronics Fair).
Implications for Apple
We believe iPhone 5 is a very important product launch from Apple’s point of view. The iPhone is the most valuable business for Apple and accounts for more than 50% of our $510 price estimate for Apple stock.
Apple’s iPhone 4 came in June last year, and there is huge pent-up demand for iPhone 5 among consumers. Just the rumors surrounding the iPhone 5 are helping support the stock amid a decline in broader markets including tech. (see Speculation About New iPhone(s) Lifting Apple’s Stock).
If Samsung is able to successfully block the sales of iPhone 5 even in a few markets, this could be a setback for Apple and set the stage for some nasty litigation.
We expect the iPhone 5 to drive Apple’s mobile phone market share from 3% in 2010 to 5% this year, and we expect this market share to climb in the coming years.
You can tweak the above chart yourself to see how sensitive is iPhone market share driver to Apple’s stock value.
See our complete analysis for Apple stock here
Notes:- Samsung seeks sales ban on Apple’s next iPhone, Korea Times, September 18th, 2011 [↩]
- Samsung considers legal action over Apple’s new iPhone, Reuters quoting Maeil Business Newspaper as the source, September 20th, 2011 [↩]
- Apple: Samsung Copied Design, The Wall Street Journal, April 19th, 2011 [↩]
