updated 07:04 am EDT, Wed May 16, 2012
Samsung and HTC shares suffer at the hands of Apple
Samsung and HTC stock have both taken a hit thanks to separate actions instigated by Apple. Samsung's stock saw $10 billion wiped off its value following a report by DigiTimes indicating that Apple had placed a large order for DRAM from its struggling Japanese competitor Elpida. Separately, HTC's shares also slumped by over 6 percent following an Apple initiated ITC injunction being enforced by US Customs, stopping the importation of its hotly anticipated One X and EVO 4G LTE handsets.
Samsung is the world's largest maker of DRAM and its market dominance has been helped in a large part due to Apple's past orders. This left slim pickings for Elpida, which filed for bankruptcy protection in February with debts amounting to around $5.6 million. Apple's new order with Elpida for DRAM is said to have accounted for as much as 50 percent of its production capacity, so large is the size of the deal reportedly struck.
Micron Technology is also said to be in talks to acquire or partner with Elpida, which could pose a serious competitive threat to Samsung's market leadership. Analysts talking to Reuters suggest that Apple has likely made move as part of a strategic initiative that would improve its bargaining power by helping to keep Elpida alive. Apple's move has also seen market value wiped from mobile memory maker Hynix as well.
HTC's woes surround an ITC ruling that the Taiwanese firm had violated Apple patents dating back to December 19. The ITC ruled that HTC was not allowed to sell new phones after April 19 unless it could demonstrate that its new devices no longer infringed on Apple's '647 patent that involves the ability for a user to click and launch things like phone numbers and email addresses in Android messaging and browser apps.
'The US availability of the HTC One X and HTC EVO 4G LTE has been delayed due to a standard US customs review of shipments that is required after an International Trade Commission exclusion order,' reads a statement from HTC. HTC said that it believed that its new devices comply with the ITC ruling and are applying to the relevant US agencies to lift the hold its smartphone shipments. 'We believe we are in compliance with the ruling and HTC is working closely with customs to secure approval,' the company added.
Samsung is riding high on record profits due to breakout smartphone sales, but the loss of all or part of Apple's DRAM business could impact its revenue in the order of tens of millions of dollars. HTC, however, is in a much more precarious financial position. Its One X has withstood the impact of the Samsung Galaxy S III launch well, with some segments of the Android community underwhelmed by Samsung's latest flagship smartphone. Any delay in getting its flagship smartphones on sale in the US is something that HTC can ill afford with the Galaxy S III not far from reaching the market.