Apple’s stock jumped to a 2016 high after rival Samsung suspended production of its flagship Galaxy Note 7 smartphones following reports of fires in replacement devices.
Fires in the smartphones that were meant to replace devices that had been recalled because of their propensity to explode could be a disaster for Samsung and a potential boon to Apple.
Apple’s stock was up 2.2 per cent at $116.59 in afternoon trading and was the largest contributor to gains on the S&P 500. Earlier, Samsung’s stock had dipped 1.5 per cent.
Samsung’s ongoing problems suggested the world’s largest smartphone maker has failed to fix a problem that has already damaged its brand and threatened to derail a recovery in its mobile business.
Following the reports of fire in replacement devices, Verizon Communications, AT&T and other wireless carriers suspended sales and exchanges of Note 7s.
Samsung’s latest woes come as the US supreme court prepares to hear arguments on Tuesday in the bitter patent dispute between the world’s two top smartphone manufacturers over the amount Samsung should pay Apple for copying the iPhone’s distinctive look.
Long-term impact
The justices’ ruling, due by the end of June, could have a long-term impact for designers and product manufacturers going forward because the court, if it agrees with Samsung, could limit the penalties for swiping a patented design. Samsung paid Apple $548.2 million last December, fulfilling part of its liability stemming from a 2012 verdict for infringing Apple’s iPhone patents and copying its look.
But Samsung will argue before the supreme court that it should not have had to make as much as $399 million of that payout for infringement of three patented designs on the iPhone’s rounded-corner front face, its bezel and the colourful grid of icons that represent programmes and applications.
It will be the US court’s first case involving design patents in more than 120 years, when the products at issue were carpets and rugs.
Apple sued its South Korean rival in 2011, claiming Samsung stole its technology and the iPhone’s trademarked appearance.
– (Reuters)
