Android players hit in fallout from Samsung's patent loss to Apple

ZTE and HTC shares take blows after US court finds South Korean firm violated Apple patents

PUBLISHED : Tuesday, 28 August, 2012, 12:00am
UPDATED : Tuesday, 11 October, 2016, 1:03pm

The shares of some of the world's top Android device makers were hammered in trading yesterday, following Samsung Electronics' stunning loss to Apple last week in their patent dispute in the United States.

The US verdict, which handed Apple a vital legal precedent, has put to question the product development and launch strategies of manufacturers such as Samsung that use Google's free Android operating system on their smartphones and media tablets.

A nine-member jury in a San Jose, California, court awarded Apple US$1.05 billion in damages after finding that Samsung violated six of seven iPhone and iPad-related patents, and dismissed the South Korean company's counterclaims.

Apple could ask for triple the amount of damages since the jury found "wilful" infringement by Samsung.

Shares in Samsung slumped as much as 8 per cent, its biggest daily percentage drop in nearly four years, to 1.173 million won (HK$7,850), before closing at 1.180 million won. Reuters said that fall wiped more than US$12 billion off the Korean electronics giant's market value.

ZTE, the world's fifth-largest telecommunications equipment supplier, also took a beating, as its shares declined 7.05 per cent to close at HK$11.08. The Shenzhen-based company is scheduled to launch a new 4G smartphone today in Hong Kong.

Shares in Taiwanese smartphone maker HTC dropped as much 3.2 per cent in early trading before settling in the afternoon, down 1.90 per cent to NT$257.50.

Bernstein Research said in a report that Samsung and other Android device makers "will make design and software changes" to avoid infringing Apple's patents. It described Samsung's "worst-case scenario" would be negotiating and agreeing to pay Apple a licence fee on all its Android smartphones.

Google said most of Apple's patent claims "don't relate to the core Android operating system, and several are being re-examined by the US Patent Office".

Samsung said it would appeal against the US jury's verdict and seek a stay on any product ban that might be granted in a September 20 hearing. Apple filed a preliminary injunction with the California court to bar Samsung from selling about 21 infringing products, including the Nexus S 4G and Galaxy Tab 10.1.