Apple, Inc. market cap up $11.7 billion after news of Samsung ITC import ban

Posted:
in AAPL Investors edited January 2014
One week after the Obama administration's veto of an import ban affecting Apple helped to send the company's stock up $6.9 billion, news of an import ban affecting Samsung has again helped Apple's market value gain ground, this time by almost twice as much.

AAPL
Source: Google Finance


Investors encouraged by news of the decision to ban certain infringing Samsung models (which was issued by the U.S. International Trade Commission last Friday after the market closed) sent Apple's stock up $12.91 (2.8 percent) to close at $467 today.

The ban won't take affect for at least 60 days, and could theoretically be vetoed as well, although the circumstances in the two cases are not closely related and ITC ban reversals are extremely rare.

Last Monday, news of the veto announced over the previous weekend sent Apple's stock up $6.91 or 1.49 percent, enough to raise Apple's market capitalization by just over $6.9 billion, a figure as large as Apple's most recently reported quarterly net income.

The Wall Street Journal had called attention to Samsung's corresponding stock price drop earlier in the day, as Asian investors reacted to the news while much of California was still asleep. Over the past week, Apple's stock gave up Monday's gains, leaving it almost exactly in the same position it was in at the start of the previous week.

Identical bans, different as night and day

While both of the ITC's import ban decisions, first affecting Apple and now Samsung, were related to patent infringement claims, the nature of the patents involved, and the stated intent of the patent holders in pursuing the bans are vastly different.

Samsung's accusations of patent infringement against Apple concerned a patent that Judge Lucy Koh had already ruled Apple did not infringe upon last summer in a summary judgement.

Additionally, Samsung's patent ban only affected older iPhone 4 and iPad 2 models (and not Apple's newer devices that continue to use 3G UMTS) because the "infringement" Samsung claimed wasn't related to Apple's own software or designs, but rather alleged against technology within an Intel Infineon baseband processor Apple used (pictured below on the iPhone 4 logic board).


GSM iPhone 4 logic board


Source: iFixit


Intel licensed the technology from Samsung for resale, but Samsung claims that Intel's sale to Apple retroactively voided the agreement. Samsung also licensed the same patent portfolio to Qualcomm, the company that makes the baseband processors Apple's newer devices use. Samsung was not able to convince the ITC that its Qualcomm license could similarly be revoked in order to embroil Apple in an identical patent claim, however.

The controversial "Standards Essential Patent" was claimed to be necessary in delivering products compatible with 3G UMTS wireless networking, meaning that Apple purportedly wouldn't be able to design products without "infringing" upon Samsung's patented concept. As a component of such an industry standard, Samsung's patent was committed to FRAND (Fair, Reasonable and NonDiscriminatory) licensing rules.

For this reason, the Obama administration detailed that its veto decision was motivated by an effort to stop patent abusers from gaining "undue leverage" in similar cases, a ruling that not only benefitted Apple, but would also assist Samsung in parallel import ban cases being brought against it involving similar Standards Essential Patents, potentially even in cases that didn't specifically involve FRAND-licensing commitments.

Apple's invention patents

In contrast, Apple's patents involved the most recent import ban case involve novel technologies and designs Samsung could work around by simply developing its own original technologies.

A report by Florian Mueller of FOSS Patents details Apple's 'non standards essential' patent claims as involving:

U.S. Patent No. 7,479,949 describing (below) a "touch screen device, method, and graphical user interface for determining commands by applying heuristics," of which Mueller noted "Apple wanted to call 'the Jobs patent' in a trial in Judge Posner's court that never took place." and stated "this patent is under reexamination pressure; Apple also made headway with other multi-touch patents earlier this week when it won a remand to the ITC of its case against Google's Motorola Mobility."

US7479949
Source: U.S. Patent Office


U.S. Patent No. 7,912,501 describing (below) Apple's "audio I/O headset plug and plug detection circuitry."

US7912501
Source: U.S. Patent Office


To avoid the import ban, Samsung only has to develop products that don't infringe. As Mueller reported, "Samsung presented to the ITC products that it said (and Judge Pender agreed) don't infringe," adding, "If legality is so readily available, a veto [of the import ban] isn't warranted." Samsung's reference to "rectangles and rounded corners" is often repeated by the company and its supporters to minimize the company's patent infringements.

Rather than outlining its plans to release non-infringing products, Samsung issued a statement to The Verge saying, "Apple has been stopped from trying to use its overbroad design patents to achieve a monopoly on rectangles and rounded corners. The proper focus for the smartphone industry is not a global war in the courts, but fair competition in the marketplace. Samsung will continue to launch many innovative products and we have already taken measures to ensure that all of our products will continue to be available in the United States."

Samsung's reference to "rectangles and rounded corners" is often repeated by the company and its supporters to minimize the company's patent infringements documented in a series of global cases.

Apple issued a less specific statement referencing only Samsung's parallel losses in various jurisdictions, saying, "with today's decision, the ITC has joined courts around the world in Japan, Korea, Germany, Netherlands and California by standing up for innovation and rejecting Samsung's blatant copying of Apple's products. Protecting real innovation is what the patent system should be about."
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Comments

  • Reply 1 of 29
    Not to mention news of New Iphone announcement
  • Reply 2 of 29
    red oakred oak Posts: 628member
    I bet the stock spike today was the result of the 9/10 iPhone event date being leaked and not because of the patent decision

    The stock was flat in the after the patent announcement Friday
  • Reply 3 of 29
    correctionscorrections Posts: 1,234member
    Yeah who knew Apple was going to release a new iPhone?
  • Reply 4 of 29
    rogifanrogifan Posts: 10,669member
    Sorry I don't see the correlation. As others have said, if anything the stock is up because of the rumored iPhone announcement date in the WSJ.
  • Reply 5 of 29
    nagrommenagromme Posts: 2,834member
    Good to know the stock rises for silly reasons, same way it falls!
  • Reply 6 of 29
    ftaokftaok Posts: 6member
    It was never a question of ehether Apple would release a new iPhone. It was a question of when. A 9/10/13 introduction indicates that Apple intends to have the new phone for sale before the end of the quarter.

    In my opinion, this would result in revenues and EPS landing on the high side of Oppenheimer's range. Thus driving up the stock price.
  • Reply 7 of 29
    Take that, Needham!
  • Reply 8 of 29
    jungmarkjungmark Posts: 6,629member
    Dooooooooooomed! /s
  • Reply 9 of 29
    SpamSandwichSpamSandwich Posts: 30,572member

    Quote:

    Originally Posted by Daniel Epstein View Post



    Not to mention news of New Iphone announcement


     


    I think that's what did it.

  • Reply 10 of 29
    tooltalktooltalk Posts: 766member

    Quote:

    Originally Posted by jungmark View Post



    Dooooooooooomed! /s


     


    Apple is effectively a too-big-to-fail and the gov't will do whatever it can do to protect the company.   Wish I had bought it when it was sub-$400.

  • Reply 11 of 29

    Quote:

    Originally Posted by Rogifan View Post



    Sorry I don't see the correlation. As others have said, if anything the stock is up because of the rumored iPhone announcement date in the WSJ.


     


    Indeed correct. There's isn't a single insider investor note out today about the Samsung ban relating to Apple, there was 1 in relation to Samsung's stock. It's all about the WSJ alleged announcement date. Yes everyone expected a new iPhone, WHEN is important for investors. Pure junk piece here. 

  • Reply 12 of 29
    lkrupplkrupp Posts: 6,608member

    Quote:

    Originally Posted by tooltalk View Post


     


    Apple is effectively a too-big-to-fail and the gov't will do whatever it can do to protect the company.   Wish I had bought it when it was sub-$400.



     


    Baloney!

  • Reply 13 of 29
    mhiklmhikl Posts: 471member
    Send Obama a cheque, Apple— political contributions and all. That's how it's usually done, isn't it?

    Nope. :no: Not Apple. Darn that dang integrity gene.

    Seems the party-popers are out in suits.
  • Reply 14 of 29
    backstabbackstab Posts: 138member


    Samsung issued a statement: "Apple has been stopped from trying to use its overbroad design patents to achieve a monopoly on rectangles and rounded corners."


     


    The only appropriate response to this would be something along the lines of 'I know you are, but what am I?'  THAT'S how stupid that statement is.

  • Reply 15 of 29
    jungmarkjungmark Posts: 6,629member
    backstab wrote: »
    <span style="color:rgb(24,24,24);font-family:arial, helvetica, sans-serif;line-height:18px;">Samsung issued a statement: </span>
    <span style="color:rgb(24,24,24);font-family:arial, helvetica, sans-serif;line-height:18px;">"Apple has been stopped from trying to use its overbroad design patents to achieve a monopoly on rectangles and rounded corners."</span>


    The only appropriate response to this would be something along the lines of 'I know you are, but what am I?'  THAT'S how stupid that statement is.

    In Sammy's defense, it was forced to come up with an original response since copying Apple wouldn't be appropriate.
  • Reply 16 of 29

    Quote:

    Originally Posted by ftaok View Post



    It was never a question of ehether Apple would release a new iPhone. It was a question of when. A 9/10/13 introduction indicates that Apple intends to have the new phone for sale before the end of the quarter.



    In my opinion, this would result in revenues and EPS landing on the high side of Oppenheimer's range. Thus driving up the stock price.


     


    That's what I'm thinking. Launch weekends (and the weeks following) see huge sales numbers and Apple could get in a full 2 weeks of sales in Sept to help out the quarter.


     


    Quote:

    Originally Posted by tooltalk View Post


     


    Apple is effectively a too-big-to-fail and the gov't will do whatever it can do to protect the company.   Wish I had bought it when it was sub-$400.



     


    Sure bud. The government didn't do anything to protect Apple - they did something about companies abusing and stealing IP. Since Apple was on the receiving end of that abuse then they are the benefactors. Nothing more to it than that.

  • Reply 17 of 29
    skewskew Posts: 5member


    What a dumb thread. Last Monday the stock spiked up, but Tuesday through Friday the stock gave up all that gain and more. And here, today we have a headline that should read "AAPL stock value recoups almost all previous weeks' losses".

  • Reply 18 of 29
    paul94544paul94544 Posts: 1,027member
    Quote:
    Originally Posted by tooltalk View Post

     

    Apple is effectively a too-big-to-fail and the gov't will do whatever it can do to protect the company.   Wish I had bought it when it was sub-$400.

     

    Ridiculous opinion which has been fully explained as FRAND abuse not patent abuse , futher compounded by his mistake at not buying stock when it was at 393 like I did or are you another guy caught with your shorts down?
  • Reply 19 of 29
    paul94544paul94544 Posts: 1,027member
    Quote:
    Originally Posted by jungmark View Post



    In Sammy's defense, it was forced to come up with an original response since copying Apple wouldn't be appropriate.

     

    I wonder if there will ever come a time when Samsung's board and/or investors will start to question their blatant copying of other companies patents. I am guessing at some point the cost of protecting themselves from patents and damage to the Samsung brand as a result will start to affect their bottom line? I hope so! I for one will never buy anything from Samsung ever again and try to not buy anything sourced with their junk either if at all possible practically.
  • Reply 20 of 29
    MarvinMarvin Posts: 14,195moderator
    red oak wrote: »
    I bet the stock spike today was the result of the 9/10 iPhone event date being leaked and not because of the patent decision

    The stock was flat in the after the patent announcement Friday

    The number of outstanding shares seems to have dropped a bit. Back in late April, they were noted as having 940m:

    http://www.reuters.com/article/2013/04/24/us-apple-results-idUSBRE93M1B620130424

    They are now at 908m:

    http://www.google.com/finance?client=ob&q=NASDAQ:AAPL

    so somewhere between May-Aug, they must have bought back 32m shares, which at $400 would be $12.8b. If any of this happened recently, that must have boosted the stock price a little. I imagine they'll do buybacks at regular periods when there's a drop because buying it when it goes down allows them to buy back more.
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