Apple Loses Patent Lawsuit in Japan - Analyst Blog


According to Bloomberg, the Intellectual Property High Court, Tokyo, ruled in favor of Samsung, rejecting Apple 's ( AAPL ) patent infringement lawsuit. The patent infringement was related to the 'synchronization of music and video data in smartphones and tablets (Samsung's Galaxy brand) with servers'.

In August, the Tokyo District Court ruled in favor of Samsung in the same patent litigation case. Lately, Apple has received mixed results in the patent infringement lawsuits that it is fighting against Samsung at home and abroad.

In February, the court rejected Samsung's appeal to ban iPhone and iPads in Japan. Last week, Apple again received a favorable ruling from the Tokyo District Court when it ruled that Samsung infringed Apple's technology.

Amid these positive rulings, Apple suffered a major blow in the U.S. when the International Trade Commission (ITC) upheld one of Samsung's patent infringement claims. The ITC in its final verdict imposed a ban on several older models of the iPhone and iPad in the country. The import ban was levied since Apple's devices are assembled in China and sold in the U.S. and the world over.  

Over the last couple of years, Apple has hardened its stance in protecting its intellectual property from misuse and violations. The company has been aggressive in filing lawsuits against handset makers, such as Samsung and HTC, and has accused these manufacturers of blatantly copying its iPhone and iPad designs.

Despite its efforts to curb competition, Apple's share in the global smartphone market dropped from 23.0% in the first quarter of 2012 to 17.3% in the first quarter of 2013, according to IDC. During the same period, however, Samsung's market share rose from 28.8% to 32.7%.

Nonetheless, the Japanese smartphone and tablet markets are dominated by Apple. According to Tokyo-based MM Research Institute Ltd, Apple has a 53% market share in tablets while Samsung has a 4.3% share. In the smartphone market (1Q13), Apple has a 40% share while Samsung does not feature among the first five vendors, according to IDC. Moreover, IDC Japan reported that the iPhone maintained its number one position in 2012.  

Thus, any unfavorable ruling in Japan could make a dent in Apple's competitive position and affect sales. Moreover, stiff competition from Samsung, both in terms of product range and pricing, are headwinds for the company. Other smartphone makers, such as Nokia ( NOK ), Sony and Research In Motion ( BBRY ) are other contenders for market share. Google ( GOOG ) has also outdone Apple with its Android operating system.

Currently, Apple carries a Zacks Rank #3 (Hold).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: AAPL , BBRY , GOOG , ITC , NOK

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