www.bloomberg.com/news/2012-08-26/sam...

Samsung Slumps Most in 4 Years on U.S. Sales Ban Concerns
Samsung Electronics Co. (005930) plunged the most in almost four years, wiping out more than $12 billion in market value, on concern some devices may be banned in the U.S. after a jury said it violated Apple Inc. (AAPL) patents.
Samsung plummeted 7.5 percent after a California court on Aug. 24 ruled the world’s biggest handset maker infringed six of seven patents. Jurors said the Suwon, South Korea-based company must pay more than $1 billion in damages in the first lawsuit between the dominant global smartphone rivals to go before a U.S. jury.
A ban may undermine Samsung’s grip on a smartphone market valued at $219.1 billion by Bloomberg Industries and set a precedent for rival handset makers that use Google Inc. (GOOG)’s Android operating system. A judge scheduled a hearing next month to consider Apple’s request for a permanent U.S. sales ban on devices such as the Galaxy S and S II smartphones and the Galaxy Tab 10.1 computer.
“What’s concerning is whether any ban will be extended to flagship models and will have an impact on cases in other places,” Seo Won Seok, a Seoul-based analyst at Korea Investment & Securities Co., said by phone today. “Perhaps Samsung has technology to avoid some infringements, but they also need to come up with ways to get around Apple’s patents within the Android operating system.” Injunction Chances
“We expect there is a two-thirds chance of an injunction against Samsung products,” Peter Misek, an analyst at Jefferies & Co. Inc., wrote in an Aug. 26 report.
Samsung’s schedules for introducing products won’t be affected by the verdict, James Chung, a Seoul-based spokesman for the company, said by phone on Aug. 25.
The global lineup for the rest of this year includes the next version of the Galaxy Note, which sold more than 10 million units in less than a year. The company began selling a tablet edition of the Note this month, following the May release of the Galaxy S III, the newest version in its bestselling smartphone series.
Samsung, which has gotten around other sales bans by modifying some product features, has sought to differentiate its products since the global patent fight with Apple began last year, and the design and feature of the Galaxy S III may be distinctive enough to avoid a ban, Seo said. Largest Customer
HTC shares dropped 1.9 percent to NT$257.50 in Taipei trading, while ZTE Corp. (763), another Android-phone maker, declined 7.1 percent in Hong Kong trading. Nokia Oyj (NOK1V), which doesn’t make Android phones, gained as much as 11 percent in Helsinki trading today.
“Although this situation will be a short-term relief to HTC if Apple successfully bans Samsung’s questionable devices from the U.S. market, we see increasing litigation risks for HTC,” Jeff Pu, who rates the stock reduce at Fubon Financial Holding Co., wrote in an Aug. 27 note.
Two of the patents in the case brought by Apple against Samsung are also part of the iPhone maker’s case targeting more than a dozen HTC devices before the International Trade Commission. HTC declined to comment in an e-mail. Most claims made by Apple against Samsung “don’t relate to the core Android operating system,” Google said yesterday.
Apple is Samsung’s largest customer, even as they compete to sell phones that allow users to surf the Web and play games, and as they fight in courts on four continents over patent infringement claims. Apple accounts for about 9 percent of Samsung’s revenue, making it the company’s largest customer, according to data compiled by Bloomberg.
“It’ll take some time for an actual sales ban to take effect, and Samsung will appeal, making it a long-term fight,” Heo Pil Seok, chief executive officer at Seoul-based Midas International Asset Management Ltd., which oversees $5 billion, said by phone. “This will be an uncertainty for Samsung, and investors hate uncertainty the most.”