GO
Loading...

Product ban? Samsung won't be sweating it

Friday, 9 Aug 2013 | 1:14 AM ET
Bloomberg | Getty Images

A victory for Apple at Friday's International Trade Commission ruling is likely to have little impact on Samsung Electronics' market share and stock performance, according to industry experts.

The commission is set to decide whether some Samsung products should be banned in the U.S and comes a week after President Obama vetoed a product ban on certain Apple devices.

Still, analysts believe that the outcome will have little bearing in the marketplace given Samsung's robust performance during the last quarter.

(Read more: Apple vs. Samsung debate: Which really makes more money?)

The South Korean giant dethroned Apple in handset profits during the second-quarter, posting $5.2 billion in operating profit compared to Apple's $4.6 billion. Furthermore, Samsung notched 33.1 percent in global market share in the quarter while Apple's share declined to 13.6 percent, which is a three-year low according to a report by Strategy Analytics.

Samsung shouldn't sweat ITC ruling: Pro
Edward Snyder, Co-Founder & Managing Director at Charter Equity Research thinks the South Korean giant is already winning the handset war and sees no cause for concern about the ITC decision.

"When you step back and look at the big picture, the answer is already pretty clear that Samsung is winning this fight so why should South Korea start a bigger brawl when they are already homegrown favorites winning the war?" said Edward Snyder, co-Founder and managing director at Charter Equity Research on CNBC Asia's "Squawk Box."

"This is more of a headline story in a political debate than it is about economics," he added.

Snyder used the case of the 2008 patent battle between American semiconductor giants Broadcom and Qualcomm to show why an Apple victory at the ITC would not dent Samsung's share price.

(Read more: An 'emerging' threatto Samsung, and it's not Apple)

"The ITC put an injunction on Qualcomm in certain parts of the U.S. and in addition, they had to a pay $1 billion fine to Broadcom, but it had no impact on Qualcomm's stock price."

"Investors look at growth in revenue earnings and market share, that's what determines the stock price. You can have one-time charges but if they're one-time, it's not an on-going issue so it doesn't really affect the stock," he said.

Apple vs. Samsung spats have no market impact: Pro
Manoj Menon, partner and managing director at Frost and Sullivan, tells CNBC that fights between Apple and Samsung have had no material impact on the market position of either of these companies.

Fitch Ratings agreed, saying that a decline in Samsung's competitiveness or a significant loss in its market share is more likely to have a negative impact than a product ban.

(Read more: Samsung attempts to reinvent itself through disruption)

In a further measure of support, S&P ratings agency raised Samsung's long-term credit rating by a notch to 'A-plus' on Thursday, saying the firm's financial performance would be solid for the next two years.

Fitch went on to add that the Obama administration's decision to overturn a ban on importing certain Apple products, including the iPhone 4 and iPad mini, will not hurt Samsung.

(Read more: How Obama's veto of iPhone ban will change tech wars)

The iPhone 4 and iPad mini are older models that would not directly compete against Samsung's flagship devices such as the new Galaxy Tab 3, released just last week.

"Given the lengthy legal process, only outdated models have been the subject of trials, and thus, the potential impact on Samsung's cash flow is very limited," Fitch said.

By CNBC.com's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC

  Price   Change %Change
AAPL
---
593
---
BRCM
---
QCOM
---

Featured

Contact Technology

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More
  • Matt Hunter is the senior technology editor at CNBC.com.

  • Cadie Thompson is a tech reporter for the Enterprise Team for CNBC.com.

  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.

  • Jon Fortt is an on-air editor. He covers the companies, start-ups, and trends that are driving innovation in the industry.

  • Lipton is CNBC's technology correspondent, working from CNBC's Silicon Valley bureau.

  • Mark is CNBC's Silicon Valley/San Francisco Bureau Chief covering technology and digital media.