Image via CrunchBase
An intensifying legal battle between Samsung Electronics Co and Apple Inc is
expected to crimp growth at one of the fastest growing businesses of the Korean
company, while threatening to worsen business ties with the firm’s largest
customer.
The two technology firms have been locked in an acrimonious global battle
over smartphone and tablet patents since April, and Apple has successfully
blocked Samsung from selling its latest tablets in Germany and some smartphone
models in the Netherlands.
The iPhone and iPad maker has also forced its rival to indefinitely delay
launching its new Galaxy tablets in Australia, where a court will
give its ruling this week.
Another loss could dent Samsung’s ambitious attempt to close the gap with
Apple in the global tablet market. The Galaxy gadgets, powered by Google’s
Android operating system are seen as the biggest challengers to Apple’s mobile
devices.
“Samsung’s tablet business will be most affected and its chip business will
also take a hit as Apple moves to diversify away from Samsung to the likes of
Toshiba,” said Nho Geun-chang, an analyst at HMC Investment Securities.
“But taking passive steps for fear of losing its biggest customer will slow
down strong growth momentum at its telecoms business, which Samsung doesn’t want
to see as the business is set to become the biggest earnings generator this year
and make up for weakening chip profits. It’ll be a costly battle for
Samsung.”
The South Korean conglomerate supplied Apple with about $5.7 billion in
components last year, some 4 percent of Samsung’s total sales.
Apple’s portion grew to 5.8 percent of Samsung’s sales in the first quarter,
driven by booming iPad and iPhone sales, which
Samsung supplies chips for, along with Japan’s Toshiba.
Apple and Samsung are scrapping for top spot in the smartphone market, having
overtaken the market leader for the past decade, Finland’s Nokia, in the second
quarter.
Related articles
- Samsung Electronics Co is considering legal action to ban sales of Apple’s new (ecomtechnology.biz)
- Samsung Might Seek Ban On iPhone 5 (huffingtonpost.com)
