Samsung Electronics shares tumbled more than 7 percent today, wiping $12 billion
Samsung Electronics shares tumbled more than 7 percent today, wiping $12 billion off the South Korean giant’s market value, as Apple Inc’s sweeping legal victory in their U.S. patent battle raised concerns about its smartphone business – its biggest cash cow.
A U.S. jury found Samsung had copied critical features of the hugely popular iPhone and iPad and awarded Apple $1.05 billion in damages in the most closely watched patent trial in years.
Shares in Samsung – the world’s biggest technology firm by revenue – tumbled as much as 7.5 percent, its biggest daily percentage drop in nearly four years, to 1.183 million won ($1,000), versus a 0.5 percent drop in the broader market.
Trading volume was heavy, more than doubling the last week’s daily average by early Monday trade.
Analysts estimate Samsung’s earnings will be reduced by 4 percent this year due to increased patent-related provisioning.
The jury at a federal court in San Jose, California, found on Friday that Samsung infringed on six of seven Apple patents. The verdict, which came after less than three days of jury deliberations, could lead to an outright ban on sales of key Samsung products and will likely solidify Apple’s dominance of the exploding mobile computing market.
Apple plans to file for a sales injunction against Samsung, its lawyers said, and the judge in the case set a hearing date for September 20.
Top executives at Samsung, led by vice chairman Choi Gee-sung and head of its mobile division JK Shin, held an emergency meeting on Sunday.
The biggest concern for Samsung remains whether its latest flagship product the Galaxy S III, which was not included in the case, will be also targeted by Apple and included in the list of products banned in the U.S. market. The model is Samsung’s best selling smartphone, with sales topping 10 million since its late May debut.
But Samsung’s skill as a “fast executioner” – quick to match others’ innovations – would likely mean tweaked, non-patent infringing devices would be on the market soon after any ban came into place, analysts said.
Damn. Both phones are great in their own ways. Samsung’s Galaxy is so fast, yet the iPhone takes better pictures.