Apple wins, Samsung rethink

This has been confusing me for a long time, the ongoing patent disputes between Samsung and Apple. I know that the two products look similar in design and feel, and the optimal design might have been held by one or the other, or both. I use optimal in the sense that the single button design is huge for the fans. Now there is actually a number, 1.05 billion Dollars in damages has been awarded to Apple by a US court, which has led the Samsung board to hold an emergency meeting overnight. A Korean court called it a tie on Friday, at least that is what a Marketwatch article says: Apple, Samsung tie in Korea verdict. The upshot of it all is that Samsung devices might be banned from selling their blockbuster products in the US. For the time being. Which is of course is not good for the company, the share price in Korea ended the day down 7.61 percent. Down 97 thousand Won on the session to close at 1,178,000 Won. More confusing is dealing with the large outlandish numbers.


A good friend of mine asked me once (several times) whether or not he could buy the Samsung devices stock separately, and I said no. Not easily anyhow. First things first, the stock is only available to investors in Seoul and through a GDR program in London, check out their Samsung investor relations page. But more importantly I told my good mate Bruce, you can't own the juicy parts, the phone and the tablets. You have to own all the other products when you buy Samsung Electronics. And that includes fridges, washing machines, air conditioners, TVs, laptops, copiers, cameras, networking devices and chips. Check out the Samsung 2011 Annual Report.


And inside of the handset sales, you want to only be with the high margin smartphones right? Well, as per that annual report: "Worldwide demand for mobile phones was a staggering 1.5 billion units in 2011. Samsung Electronics accounted for 330 million of those units, far exceeding our target. We realized impressive growth in smartphone sales as well. The bestselling GALAXY S II sold more than 20 million units since its launch in April 2011." So it is always going to be tough to own the company on these sort of numbers. Even if the sub segment is the most profitable, unlike Apple you get exposure to all the other products. I am left with the same conclusion as I had initially with my chat with Bruce. You can't really get exposure to what you want to. My advice to him is the same as before. If you want to not be owning Apple shares, and are looking for the competitor, then perhaps the place to be looking is Google. And not Samsung. The matter is not over. Samsung are appealing the ruling. So this is by no means finished. And in the short term, the real winner is seen as Nokia/Microsoft. See Nokia to Microsoft Seen Benefiting From Possible Samsung Ban.