) has reportedly received a favorable preliminary ruling from the
International Trade Commission ("ITC") in a patent infringement
case against Samsung.
The ITC ruled that Samsung has infringed Apple's patents on a
certain "text-selection feature". However, the ITC ruled out
Apple's allegation that Samsung violated Apple's patent for the
detection of a device when plugged into its microphone jack.
Now, the full commission will decide the patent infringement
issue by Samsung in August. If it upholds the ITC judge's
decision, Samsung could face a sales ban of its Galaxy, Transform
and Nexus devices in the U.S. The ITC has the capacity to block
sales of disputed articles in the U.S.
Over the last couple of years, Apple has been highly vocal
about protecting its intellectual property from misuse and
violations. The company has been aggressive in filing lawsuits
against other handset makers such as Samsung and HTC, and has
accused these manufacturers of blatantly copying its iPhone and
iPad designs. So far, these lawsuits have yielded mixed results
The probable ban on many of Samsung's devices in the U.S. will
likely provide Apple the chance to regain some of the ground it
has lost to its South Korean rival. In 2012, Samsung emerged as
the leader in the smartphone market with 30.3% market share
compared to Apple's 19.1%. It is noteworthy that Samsung's market
share has grown 129.1% from the previous year in contrast to a
46.9% increase in Apple's market share during the same period of
We believe that significant share gains by Apple will prove to
be difficult given the stiff competition from Samsung both in
terms of product launches and pricing of products. Other
smartphone makers such as
Research In Motion
) are other contenders for market share.
We also believe that Apple's ability to innovate and grow in
developing nations, where the market is more cost-sensitive, will
determine the company's fortunes in the future. Moreover,
Apple's loyal customer base coupled with its solid balance sheet
and robust revenues bode well.
Currently, Apple has a Zacks Rank #3 (Hold).
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