Samsung Loses $1 Billion in Market Value After US Vetoes Apple Import Ban - Wall Street Journal

SEOUL—More than $1 billion was wiped out of Samsung Electronics Co.'s market value early Monday after a surprise decision by the Obama administration over the weekend to veto an import ban on some Apple Inc. products in the U.S. Early Monday, South Korea's biggest company by market capitalization fell 0.6% to 1,278,000 won ($1,137), wiping out $1.05 billion of Samsung's market capitalization. Washington's decision dealt a blow to Samsung, Apple's top smartphone competitor, just as it is seeking to expand its footprint in the U.S. market. This Friday, the International Trade Commission is slated to decide whether to ban certain Galaxy mobile product imports to the U.S. after Apple filed a complaint alleging patent violation. Samsung products subject to the decision later this week include some older models of Galaxy smartphones and tablets including the Galaxy S, Galaxy S II, Galaxy Tab 10.1 but not Samsung's latest products including the Galaxy S III or the Galaxy S4. The South Korean company declined to comment Monday on what it expects from the International Trade Commission this week. But analysts say odds are low that it will result in an ultimate ban of Samsung products in the U.S. "I think it was a good call from the Obama administration, considering the benefits to consumers," said James Song, an analyst with KDB Daewoo Securities. "Using the same logic, the Obama administration would have to make it so that Samsung products can continue to be imported in the U.S." Over the weekend, U.S. Trade Representative Michael Froman made the decision to veto the ban on some Apple devices, citing concerns about patent holders gaining "undue leverage" as well as potential harm to consumers a ban would bring. "In future, any ban Apple may win, Samsung may also lobby hard for a veto," Mark Newman, an analyst with Sanford C. Bernstein said. "If the presidential veto appears to be used to give advantage to Apple over Samsung, this would be a dangerous precedent that could upset the current good trade relations between the U.S. and South Korea." Samsung called the veto a "disappointment" as it has been putting up a tough fight to increase market share in the U.S. Apple's latest earnings report showed older versions of the iPhones may still be appealing to some customers looking for more affordable smartphones. Had a ban been implemented, it would have affected the import of Apple's iPad 2 made to work on AT&T Inc.'s network, and the iPhone 4, which runs on AT&T and T-Mobile US's airwaves. So far, the U.S. market has proved to be one of the toughest markets to crack for Samsung, the world's largest smartphone maker, as it continues to encounter legal hurdles in Apple's home turf. Samsung has been beefing up marketing of its smartphones especially in the U.S. in recent months. In March, it unveiled its latest flagship smartphone at a lavish event at Radio City Music Hall and is also setting up stores within Best Buy shops across the U.S. Analysts say Samsung has been splurging on marketing, which has been eating away at its profit margins. via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNEU94aI4OR9khg6SPG76z2VLI64pQ&url=http://online.wsj.com/article/SB10001424127887324653004578648952344694088.html

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