Apple vs. Samsung Who Is the Winner?
The recent ruling in the patent lawsuit in favor of Apple Inc. (NASDAQ/AAPL) against Samsung Electronics Co. Ltd. (KRX/005930) is seen by some as a big blow to Samsung. Technology stocks are constantly innovating, and I think market sentiment is missing the picture in this case. While Samsung did infringe against Apple and it is going to have to pay over $1.0 billion as part of the penalty, let’s take a look at technology stocks in this sector and see if there are any opportunities due to mispriced market sentiment.
First off, let’s not overthink the situation. Apple is a clear beneficiary among the technology stocks in the mobile phone sector. Market sentiment is, of course, extremely bullish of Apple, which makes entering a new position at these lofty levels quite dangerous. Stock price aside, technology stocks might approach research and development in a slightly more conservative manner now that they know how litigious Apple will be. Market sentiment will continue to remain positive, but I would wait for a pullback and a more attractive entry option in Apple.
Samsung is not traded in North America, but among technology stocks, it is clearly building a huge amount of momentum. It will appeal the ruling, no doubt, but even if it is not successful, I think the market sentiment if far overdone in this case. This patent case was for older handsets of Samsung. It does not include the best-selling Galaxy SIII. Older models have seen a huge fall-off in sales anyway, so the real hit is far less than market sentiment is indicating. If the current ruling holds, Samsung will lose approximately 1.4% of profits for the phones that are to be scheduled to be banned. Contrarian Investing