Recently, Samsung Electronics Co. filed a countersuit against Apple Inc. (AAPL) in Australia, alleging violation of seven Australian patents owned by Samsung related to wireless communications standards.
Apple had earlier won an injunction against Samsung Electronics Co., under which the latter was forced to delay the launch of Galaxy Tab 10.1 until the end of September, in Australia.
Samsung had originally scheduled the launch of its Galaxy Tab 10.1 tablet in Australia in the middle of September.
Samsung has also filed a claim to lift the ban on the Galaxy Tab as the company maintained that the Australian model of Galaxy 10.1 was different from its US models and it did not infringe upon any patents related to the Apple iPad.
This is the second time that Samsung has sued Apple on technology-based patent infringements. Very recently, Samsung had sued Apple in France, alleging violation of three technology patents relating to its UMTS (Universal Mobile Telecommunications System). Results of the counter claim remains uncertain for both the companies.
Apple, through its lawsuits against Samsung in various countries is primarily targeting Google Inc.’s (GOOG) Android-based smartphones and tablets, as Samsung is the biggest vendor of Android. With successive lawsuits and a number of injunctions against Samsung, Apple has not only restricted the growth of the Galaxy series of products but has also temporarily stalled the growing popularity of the Android-based products in Europe.
Till now, Apple seems to be in an advantageous position as it has successfully defended its design-related patent lawsuits in several countries, where it won injunctions against Samsung’s Galaxy Tabs and smartphones.
However, instead of defending the design-related lawsuits by Apple, Samsung is resorting to technology-focused lawsuits, which seems to be a new way of countering Apple. It will be interesting to see how the events unfold, as Samsung has opened up a whole new front in its war against Apple.
Apart from Australia, Apple and Samsung are entangled in legal battle in several countries, including the U.S., Germany, Korea, Japan, the Netherlands, Britain and France.
Apple’s primary smartphone and tablet markets are crowded with the likes of Research In Motion Ltd. (RIMM), Hewlett-Packard Co. (HPQ), Dell Inc. (DELL), Samsung, Cisco Systems Inc. (CSCO), Toshiba and Acer, which are gaining popularity in several international markets. However, so far Apple has managed to maintain its leadership position in the tablet market, and enjoys a very strong position in smartphone markets as well.
Of course, as the outcome remains uncertain and impending lawsuits against several companies in different countries will remain an overhang on the stock going forward. However, the various lawsuits that it has won in the recent past are heartening.
Also, Apple’s ability to spur the popularity of the products in developing nations, where it is less successful, will help dictate the company’s fortunes in future.
We maintain our Neutral rating over the long term (6-12 months). Currently, Apple has a Zacks #2 Rank, which implies a Buy rating in the near term.
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