Samsung May Try to Block iPhone 5 Launch
The situation between frenemies Samsung and Apple (NASDAQ:AAPL) is looking increasingly dire, which could lead to Samsung seeking to block the launch of the iPhone 5 in the U.S. and Europe, according to an analyst.
In what is easily the most anticipated smartphone launch of the year, Apple is expected to unveil the iPhone 5 later today, possibly making it available exclusively on Sprint at first.
Samsung makes the A5 processor that powers the iPad 2 and iPhone 5, and supplies display technology for those devices. Yet Samsung and Apple have had a legal falling out in the mobile space that coincides with each company's rise to power in the smartphone sector.
Apple's iPhone has sold over 128 million units worldwide. Samsung has shipped tens of millions of smartphones based on Google's (NASDAQ:GOOG) Android operating system, helping that platform reach 40 percent market share, roughly double that of the iPhone worldwide.
To slow Samsung's roll, Apple in 2010 sued the OEM for patent infringement, claiming the company uses its software patents in its Galaxy S smartphones and Galaxy Tab tablet computers. Samsung countersued for patent infringement.
Given the companies' current legal climate, Jefferies & Co. analyst Peter Misek said Samsung might ask for injunctions preventing the launches of the iPhone 5 in the U.S. and Europe. Apple may then in turn seek to tap other OEMs for components for its leading mobile devices.
Misek said the "relationship is souring" because Samsung has emerged as Apple's top handset rival in the global market.
The company has shipped over 10 million Galaxy S II smartphones without the benefit of a major launch in the U.S. This competitive angle, and the corresponding patent-infringement lawsuits between the companies, has led Apple to seek other suppliers of consumer electronics components.
Samsung last week struck a cross-licensing deal with Apple rival Microsoft (NASDAQ:MSFT). Samsung will not only pay a fee for each Android smartphone and tablet it sells, but it will work with Microsoft to build and market Windows Phone handsets.
"We believe Samsung wants to dual source its OS, and Microsoft now appears to have lined up the two largest handset OEMs [Samsung and HTC] to be major backers of its OS, which almost assures it of being the third major smartphone OS that the carriers desire," Misek wrote in a research note Oct. 4.
While Apple currently uses Samsung's A5 processor for its iPad and iPhone 5, Misek believes GlobalFoundries or TSMC could make an application processor for next-generation iPhones and iPads. As for iPhone and iPad displays, Apple could turn to LG Display and Sharp for production.
It is not yet clear when the iPhone 5 would be available in the U.S. or overseas, though if Samsung were to successfully win an injunction, it would create a huge disturbance in a market where millions of consumers are expecting to purchase an iPhone 5 for the holiday season.
Some might call this justice. Apple has so successfully blocked Samsung's Galaxy Tab 10.1 from launching in Australia. Samsung is mulling over scrapping its plans to sell the Tab 10.1 Down Under, according to Bloomberg Businessweek.