A South Korean court has refused a request by prosecutors to issue an arrest warrant for Samsung Electronics Vice-chairman Lee Jae-yong.
On January 19, the judge ruled that there was insufficient reason to arrest Lee Jae-yong over accusations of bribery, embezzlement and perjury.
Lee Jae-yong, known professionally as Jay Y. Lee had been waiting for the ruling overnight since a hearing on January 18.
The allegations were part of a corruption scandal which led parliament to impeach President Park Geun-hye.
Samsung Electronics, which has consistently denied any wrongdoing, said in a statement that the “merits of this case can now be determined without the need for detention”.
President Park Geun-hye is accused of abusing her position by colluding with her close friend Choi Soon-sil to use their relationship to secure millions of dollars from major companies. The money was allegedly paid into Choi Soon-sil’s non-profit foundations in exchange for favorable government treatment.
Image source Wikimedia
Prosecutors allege that Samsung paid 43 billion won ($36.3 million) to secure government support for a controversial merger of two of its affiliates.
Samsung has acknowledged making the payments but insists it did not expect anything in return.
South Korea’s special prosecutors had declared Lee Jae-yong a criminal suspect and made a formal request for an arrest warrant earlier this week.
However, the judge ruled that after reviewing the evidence it was “difficult to acknowledge the necessity and substantiality of an arrest at the current stage”.
Opposition lawmakers said the decision was “regrettable” and ignored the strength of public sentiment.
Correspondents say prosecutors’ hopes of stretching criminal proceedings to include President Park Geun-hye may have been knocked off course by the refusal to issue a warrant against Lee Jae-yong.
Samsung is South Korea’s most high-profile company, and its sales are equal to about a fifth of the country’s GDP.
Park Geun-hye, who has faced massive public protest in recent months, has been stripped of her presidential powers while the constitutional court considers her impeachment.
South Korea’s special prosecutor is seeking an arrest warrant for Samsung Electronics vice-chairman Lee Jae-yong, on bribery charges.
The Lee Jae-yong case is linked to a scandal that led to the impeachment of South Korean President Park Geung-hye.
Samsung is accused of giving donations to non-profit foundations operated by Choi Soon-sil, a close friend of Park Geun-hye, in exchange for government favors.
The donations were allegedly made as Samsung sought political support for a merger.
Lee Jae-yong, known professionally as Jay Y. Lee, was questioned for more than 20 hours at the prosecutor’s office in Seoul last week.
Jay Y. Lee is currently vice-chairman of Samsung Electronics, but since his father, Lee Kun-hee, suffered a heart attack in 2014, he is considered de facto boss of the entire Samsung Group conglomerate.
Image source Wikimedia
The news sent Samsung shares lower, with Samsung Electronics stocks down 2% by midday in Seoul, and parent firm Samsung C&T down 0.8%.
A spokesman for the special prosecutor’s office acknowledged the arrest of Lee Jae-yong could be damaging for one of South Korea’s biggest business but said “while the country’s economic conditions are important, upholding justice takes precedence”.
The claims against Samsung center on a controversial merger between the electronics giant’s construction arm, Samsung C&T, and an affiliate company, Cheil Industries.
Prosecutors allege that Samsung gave money to a company co-owned by Choi Soon-sil and her daughter, in return for Park Geun-hye’s support for the deal.
At the parliamentary hearing in December, Samsung admitted giving a total of 20.4 billion won ($17.46 million) to the two foundations, but denied seeking favors.
During that hearing, Lee Jae-yong also said Samsung had made separate payments to help fund Choi Soon-sil’s daughter’s equestrian career, including buying an $850,000 horse – something the Samsung executive says he regrets.
Earlier in the day, the special prosecutor indicted South Korea’s National Pension Service (NPS) chairman Moon Hyung-pyo on charges of abuse of power and giving false testimony.
The NPS is the world’s third-largest pension scheme and was a major shareholder in the two Samsung Group affiliates. It is claimed Moon Hyung-pyo pressured the organization to back the deal – something the NPS has denied.
Lee Jae-yong, known professionally as Jay Y. Lee, is the grandson of Samsung founder Lee Byung-chul, son of current chairman Lee Kun-hee.
Aged 48, Lee Jae-yong has spent his entire career in the company and is vice chairman of Samsung Electronics.
Image source Wikimedia
Lee Jae-yong is currently vice-president of Samsung Electronics. But since his father, Lee Kun-hee, suffered a heart attack in 2014, he is considered de facto boss of the entire Samsung Group conglomerate.
In 2015, Lee Jae-yong was nominated to join the board of Samsung Electronics – an appointment confirmed on October 27.
He is widely expected to take overall control of Samsung once his 74-year-old father steps down.
Critics say Lee Jae-yong’s position on the board is due to his birth, not his business experience.
Samsung Electronics’ vice-president and heir-apparent Lee Jae-yong is to be quizzed as a suspect in a corruption scandal surrounding the impeached South Korean president, Park Geun-hye.
The tech giant is accused of giving donations to non-profit foundations operated by Choi Soon-sil, a close friend of President Park Geun-hye.
Samsung’s donations were allegedly made in exchange for political support of a controversial merger.
Lee Jae-yong will face special prosecutors on January 12, officials said.
Samsung declined to comment.
Since his father, Lee Kun-hee, suffered a heart attack in 2014, Lee Jae-yong, 48, is considered de facto chief of the entire Samsung Group conglomerate.
Image source Wikimedia
On December 9, the South Korean parliament voted to impeach President Park Geun-hye over the scandal – a decision the country’s constitutional court has six months to uphold or overturn. Until then Park Geun-hye remains formally president but stripped of her powers, which are handed to the prime minister, a presidential appointee.
The claims circle around a merger between Samsung’s construction arm, Samsung C&T, and an affiliate company, Cheil Industries.
Prosecutors allege that Samsung gave €2.8 million euros ($3.1 million) to a company co-owned by Choi Soon-sil and her daughter, in return for Park Geun-hye’s support for the deal.
Lee Jae-yong has already given evidence to politicians over the scandal, but this is the first time he will be interviewed as a suspect by investigators.
At the parliamentary hearing last month, Samsung admitted giving a total of 20.4 billion won ($17.46 million) to the two foundations, but denied seeking favors.
Lee Jae-yong also confirmed Samsung gave a horse and money to help the equestrian career of Choi Soon-sil’s daughter, Chung Yoo-ra, something he said he now regretted.
Earlier this week two other Samsung executives were questioned by the special prosecutors, but were treated as witnesses rather than suspects.
Park Geun-hye’s position began to unravel in October last year when details of her friendship with Choi Soon-sil began to emerge. They included revelations that the president had allowed her old friend – who holds no government role – to edit political speeches.
Since then, hundreds of thousands of protestors have gathered every weekend to demand President Park Geun-hye to resign.
Park Geun-hye denies wrongdoing but has apologized for the way she managed her relationship with Choi Soon-sil, who also denies committing criminal offences.
Choi Soon-sil has been charged with coercion and attempted fraud.
Samsung Electronics said on November 29 it will consider dividing the company in two.
The South Korean tech giant has been under pressure from some investors to break itself into a holding unit and an operating company to boost shareholder value.
Samsung also announced plans to increase dividends and said it would continue to buy back more shares.
Restructuring pressure had been mounting after Samsung Galaxy Note 7 fiasco.
In October, Samsung was forced to stop production of its flagship smartphone model after failing to resolve battery problems leading to overheating and the devices catching fire.
The company it would bring in “external advisers to conduct a thorough review of the optimal corporate structure”.
Samsung pointed out that “the review does not indicate the management or the board’s intention one way or another.”
The company also said it would pay out half of its free cash flow to shareholders for 2016 and 2017 and raise the dividend for 2016 by 36% compared to 2015.
In order to improve governance, Samsung said it would nominate at least “one new, international, independent board member” as well as create a separate governance committee.
Its statement comes after US activist hedge fund Elliott Management called for the company to split into a holding unit for ownership purposes and a separate operating company.
The fund argued that a split would simplify Samsung structure making it easier to get a clear valuation of the company’s assets.
Currently, companies within the wider Samsung Group are linked through a complicated web of cross shareholding, linking Samsung Electronics to many other Samsung’s companies and affiliates ranging from shipping, to heavy industries to insurance business.
That makes it difficult for investors to get a clear idea of what each individual Samsung company is actually worth.
The benefit of splitting Samsung Electronics into two companies would be that the cross-shareholding would affect only the holding company, while the operating unit could be assessed separately – making it a lot easier to arrive at a clean company evaluation.
The proposal has won support from several of the company’s investors and it is also thought that it would give back more control to the founding Lee family behind the company.
Samsung Electronics also said it needed to maintain a net cash position of between 65 trillion won and 70 trillion won, suggesting it is not likely to pay the special dividend sought by Elliott.
Samsung profits have been hit by falling sales for its smartphones and semiconductors.
The “difficult business environment and slowing IT demand” sent net profit for Q4 of 2015 down by 40% to 3.2 trillion won ($2.7 billion).
The tech giant warned it would be difficult to maintain profits this year at the same level as 2015.
Samsung revenue for 2015 fell 5.6 trillion won to 200.6 trillion won ($165.5 billion) compared with the previous 12 months.
Strong competition from cheaper Chinese rivals such as Xiaomi and Huawei at the bottom of the market, as well as Apple at the premium end, has dented Samsung’s smartphone sales.
The Galaxy S6, the most recent top-of-the-range handset launched in April 2015, failed to excite consumers and the company has struggled to maintain market share.
Samsung forecast single-digit percentage growth in both smartphone and tablet sales amid “softening demand and intensifying competition”.
“Despite this challenging environment, the company will focus on increasing smartphone shipments and maintaining a double-digit margin through releases of competitive devices,” Samsung said in a statement.
Samsung’s other core business, semiconductors, has also met headwinds following weaker demand for personal computers.
The company makes components for the iPhone, which is itself facing a slowdown in sales.
Apple said on January 26 it expected to report the first year-on-year decline in iPhone sales in the current quarter.
Samsung Electronics is forecasting a 25% drop in profit for Q2 2014 due to a slowdown in the smartphone market and a strong Korean currency.
It expects to make an operating profit of 7.2 trillion won ($7.1 billion) in the April-to-June period, down from 9.5 trillion won a year ago.
Its operating profit has now fallen for three straight quarters.
Samsung is the world’s biggest maker of mobile phones and the handset division accounts for the bulk of its profits.
The South Korean firm said it “witnessed a slowdown in the overall smartphone market growth and saw increased competition in the Chinese and some European markets” during the period.
Meanwhile, a stronger Korean currency also hurt Samsung’s earnings during the period.
Samsung Electronics is forecasting a 25 percent drop in profit for Q2 2014 due to a slowdown in the smartphone market and a strong Korean currency
The Korean won rose more than 11% against the US dollar and nearly 7% against the euro between July 2013 and end of June this year.
A strengthening currency hurts profits of firms such as Samsung – which rely heavily on exports – when they repatriate their foreign earnings.
Samsung’s growth in recent years has been powered mainly by its mobile phone division.
The success of its Galaxy range of smartphones, coupled with a growing global demand for such gadgets, saw it displace Nokia as the world’s biggest mobile phone maker in 2012.
However, the pace of growth of the smartphone market has been slowing down and the competition in the sector has also increased, forcing manufacturers to cut costs of their devices in an attempt to attract consumers.
Analysts said that profit margins in the sector are likely to fall even further.
Various other smartphone makers including China’s Xiaomi, Huawei and ZTE have been increasing their market share steadily.
For its part, Samsung has said it “cautiously expects a more positive outlook in the third quarter”.
Samsung has launched Galaxy Round smartphone with a curved display screen.
The Galaxy Round will feature a 5.7in display.
The launch comes just days after rival LG said it would begin production of curved-screen phones next year.
Digital display technology has been progressing towards curved screens. Both Samsung and LG already offer curved organic light-emitting diode (OLED) television sets.
Samsung Electronics said the curved screen display would help consumers use some of the features on the phone, including those that enable users to check information such as date, time and missed calls when home screen is off, with more ease.
Samsung has launched Galaxy Round smartphone with a curved display screen
At the same time, users can also change music tracks on their phone, even while its display is off.
The Galaxy Round will initially be launched only in South Korea. The firm gave no indication of its plans for a global launch.
The global smartphone market has been growing rapidly.
According to research firm CCS Insight, worldwide smartphone sales will hit nearly 1 billion in 2013 – accounting for more than half the total of 1.7 billion mobile phones sold.
As result, smartphone manufacturers have been keen to offer new products to win consumers.
With display technology moving towards flexible and bendy screens, it is one area that companies have been looking at.
Samsung Electronics has announced its profits surged 76% in the last quarter of 2012, helped by sales of its Galaxy smartphones.
Net income rose to a record 7.04 trillion won ($6.6 billion), up from 4.01 trillion won in the same period a year earlier, beating analysts’ expectations.
The Korean firm said its mobile profits more than doubled over the same period.
Last year, Samsung became the world’s biggest smartphone maker, overtaking Apple, its main rival in the sector.
“Overall its earnings momentum remains intact,” said Lee Se-chul, from Meritz Securities in Seoul.
“Smartphone shipments will continue to grow, even in the traditionally weak first quarter, as Samsung’s got a broader product line-up and Apple appears to be struggling in pushing iPhone volumes aggressively.”
Samsung did not provide data on the number of smartphones it had shipped, but analysts estimate it sold 63 million smartphones in the quarter.
Samsung Electronics has announced its profits surged 76 percent in the last quarter of 2012, helped by sales of its Galaxy smartphones
The strong sales numbers come after Apple shares tumbled 12% in the US on Thursday, over fears the company was losing its edge in key smartphone markets.
Apple had reported record quarterly revenues of $55 billion, but there was disappointment over sales of the company’s new iPhone 5.
Samsung said its Galaxy line of smartphones and tablets has been its top seller, driving profits.
The handsets division, which sells about a quarter of all mobile phones in the world according to analysts, saw an operating profit of 5.44tn won, up from 2.56tn won a year earlier.
Earnings were also helped by Samsung’s displays unit, which made a profit, after losses a year earlier.
The unit enjoyed a sales boost from its organic light-emitting diodes (OLED) screen, used in the Galaxy smartphones.
The firm said its capital spending this year will be similar to 2012 levels, despite analyst expectations that it would be cut.
However, it did caution that increased competition in the smartphone sector could lead to a softening of demand in some regions.
“The furious growth spurt seen in the global smartphone market last year is expected to be pacified by intensifying price competition, compounded by a slew of new products,” the company said in its earnings statement.
“In the first quarter, demand for smartphones in developed countries is expected to decelerate, while their emerging counterparts will see their markets escalate with the introduction of more affordable smartphones and a bigger appetite for tablet PCs throughout the year.”
Both Apple and Samsung are facing tough competition in markets such as China from smartphone-makers with more competitive prices.
Samsung Electronics has announced it expects to make a record profit for the last quarter of 2012, powered by growing sales of its smartphones.
It has estimated an operating profit of 8.8 trillion won ($8.3 billion) for the quarter, a 90% jump from the same period a year earlier.
That would make it the fifth quarter in a row of record profits for Samsung.
The success of its Galaxy smartphones helped Samsung overtake Nokia as the world’s biggest phone maker last year.
Analysts said that given the popularity of its smartphones, the South Korean firm was likely to see its profits grow further in the coming months.
“Not only are their smartphone sales growing, they have also learned how to make a good profit on those sales,” said James Rooney, chairman of Market Force Company, an advisory firm based in Seoul.
“Given these factors, this streak of record breaking quarters is likely to continue for a while,” he added.
Samsung Electronics has announced it expects to make a record profit for the last quarter of 2012, powered by growing sales of its smartphones
One of the key drivers of Samsung’s smartphone sales in recent months has been its Galaxy S3 model.
However, the phone is facing increased competition, not least from rival Apple, which launched its iPhone 5 in September last year.
Other rivals, such as Nokia and HTC, have also launched new handsets powered by Windows Phone 8, in an attempt to increase their market share.
At the same time, there are also concerns that the pace of growth of sales that Samsung has seen in recent quarters could slow in the coming months.
“Investors are a bit concerned that Samsung’s momentum may slow in the first half after posting a series of record profits,” said Kim Sung-Soo a fund manager at LS Asset Management.
“The smartphone market is unlikely to sustain its strong growth, as advanced markets are nearing saturation,” he explained.
Kim Sung-Soo added that a slowdown in the smartphone division may hurt Samsung as other parts of its business, such as manufacturing memory chips and televisions, have already been impacted by a contraction in global demand.
Samsung Electronics has sought a ban on the import and sales of some Ericsson products in the US which it claims infringe its patents.
In a complaint filed with the International Trade Commission (ITC), Samsung has accused Ericsson of breaching seven of its patents.
The move counters Ericsson’s complaint to the ITC, made in November, seeking a sales ban on some Samsung products.
Ericsson has also claimed that Samsung infringed some of its patents.
The Swedish firm had a licensing deal with Samsung under which the South Korean manufacturer was allowed to use various technologies patented by Ericsson in its products.
However, the two firms have failed to renew the agreement, despite negotiating for almost two years.
Ericsson has claimed that Samsung wants to reduce the fee it pays to license the said patents, while Samsung has argued that the fee demanded by Ericsson is too high.
Samsung Electronics has sought a ban on the import and sales of some Ericsson products in the US which it claims infringe its patents
“We have sought to negotiate with Ericsson in good faith. However, Ericsson has proven unwilling to continue such negotiations by making unreasonable claims, which it is now trying to enforce in court,” Samsung said in a statement.
“Under such circumstances, we have no choice but to take the steps necessary to protect our company.”
Ericsson is one of the earliest innovators in the telecommunications field and holds thousands of patents for technologies used in everyday global communication.
Some of these technologies are key to products made by other manufacturers such as Samsung.
Companies which hold patents to such essential technologies enter licensing agreements with other manufacturers allowing them the use of patents under fair, reasonable and non-discriminatory conditions.
Firms pay royalties to the patent holder to use the technology.
Ericsson earned $938 million last year in revenue from more than 100 licence agreements with companies in the industry.
However, stiff competition has lead to a much more protective stance by many companies over their patents in order to generate revenues.
Earlier this month, European Union competition regulators accused Samsung of abusing its position of holding key patents, while trying to negotiate royalty rates with rival Apple.
Meanwhile, Nokia and Apple have also taken rivals to court over patent infringement.
A court in Tokyo has ruled that Samsung Electronics did not infringe on patents held by Apple, which is the first victory for the South Korean company.
The patent was related to transferring media content between devices.
It comes after Samsung lost a key patent case in the US last week and was ordered to pay more than $1 billion in damages.
This is one of many cases brought to courts around the world by the two smartphone market leaders.
“We welcome the court’s decision, which confirmed our long-held position that our products do not infringe Apple’s intellectual property,” Samsung said in a statement.
Tokyo court has ruled that Samsung Electronics did not infringe on patents held by Apple
Tokyo District Judge Tamotsu Shoji dismissed the case filed by Apple in August, finding that Samsung was not in violation of Apple patents related to synchronizing music and video data between devices and servers.
On 24 August, a US court ruled Samsung had infringed Apple patents for mobile devices, including the iPhone and iPad.
The company has vowed to continue to fight against Apple saying it will appeal against the US ruling.
Apple is now seeking a ban on sales of eight Samsung phones in the US market.
On 6 December, US District Judge Lucy Koh, who presided over the initial trial, will hear Apple’s plea for an injunction against the Samsung phones, although it does not include the most recent Samsung phone to hit the market, the Galaxy S3.
Samsung Electronics shares have suffered their biggest fall in a single day in almost four years, after a US jury found the technology giant copied designs from Apple.
The South Korean company’s shares fell 7% in Seoul trading, the most since October 2008.
The company was ordered to pay $1.05 billion in damages to Apple, in one of the most significant rulings in a global intellectual property battle.
Samsung will appeal over the verdict.
Analysts said investors were worried that the ruling could affect revenues.
Samsung Electronics shares have suffered their biggest fall in a single day in almost four years, after a US jury found the technology giant copied designs from Apple
“An adjustment in the next few days is unavoidable as the damage amount was much bigger than market expectations, and there are further uncertainties, such as the possibility of a sales ban,” said John Park, from Daishin Securities.
Apple has said it will seek an injunction to block sales of Samsung products in the United States, a key market, at a court hearing on 20 September.
One of the biggest concerns for Samsung is whether Apple will now target the Galaxy S3, which was not included in the recent trial, as it focussed on older products.
The flagship product is Samsung’s best selling smartphone and if it is included in a US ban on sales that would give Apple a major advantage in the market, analysts said.
A nine-member jury in San Jose, California ruled on 24 August that Samsung had infringed Apple patents for mobile devices.
It was the most closely-watched of many similar patent disputes being contested in courts around the world between electronics manufacturers.
In recent weeks, a court in South Korea ruled that both Apple and Samsung had copied each other, while a British court dismissed claims by the American company that Samsung had infringed its copyrights.
Samsung Electronics says that it expects its profits to surge 79% in the second quarter as sales of its smartphones continue to grow.
It has forecast an operating profit of 6.7 trillion won ($5.9 billion) for the period, its highest quarterly profit since 2008.
Samsung overtook Nokia as the world’s biggest maker of mobile phones earlier this year.
Analysts said its profits may rise even further in the coming months.
“Earnings will be stronger in the current quarter as sales of the high-end Galaxy S III will increase dramatically and drive the telecom division’s earnings to above 5 trillion won,” said Nho Geun-Chang an analyst with HMC Investment Securities.
“We estimate shipments of the Galaxy S III will reach 19 million units in the third quarter.”
Samsung Electronics expects its profits to surge 79 percent in the second quarter as sales of its smartphones continue to grow
Samsung launched the Galaxy S III, the latest version of its Galaxy range of smartphones, in May this year, and the gadget has been well received in the market.
Last month, the head of Samsung’s mobile phone division Shin Jong-kyun said that the firm expects to sell 10 million units of the model by July.
While it has enjoyed early success, some analysts were of the view that its sales may slow towards the end of the year due to the widely-expected launch of the latest version of the Apple iPhone.
The iPhone is seen by most analysts as the biggest rival to Samsung’s smartphones.
“We expect a correction in Samsung’s earnings in the fourth quarter, as the launch of the new iPhone will lead to a decline in Samsung’s profit in the high-end smartphone business,” said Park Jong-Min a fund manager with ING Investment Management.
Increased competition from the iPhone is not the only challenge Samsung has to deal with in the coming months.
It is also involved in a number of legal disputes over patent infringements with Apple in various countries across the world.
Earlier this month, a court banned sales of Samsung’s Galaxy Nexus smartphone and also its Galaxy Tab 10.1 tablet PC in the US, until it decides on the continuing patent case between the two firms.
There are concerns that the ban may hurt Samsung’s sales in one of its key markets.
Analysts said the biggest fear for Samsung is that the dispute may become bigger and impact other Samsung products, including the Galaxy S III.
“What they are worried about are the legal spill over effects,” said Jasper Kim of Asia Pacific Global Research Group.
“How Judge Lucy Koh’s decision to block some of these Samsung smartphones into the US market, which is Samsung’s largest mobile carrier market, will effect Galaxy S III sales. That’s what Samsung is really worried about.”
Giant tech company Apple has been ordered to pay damages to rival Samsung Electronics by a court in the Netherlands.
The court said that Apple had infringed a patent held by Samsung relating to the way phones and tablet PCs connect to the internet.
Apple, which recently became the world’s most valuable firm, has been facing various legal issues.
In a separate case, it was fined $2.3 million in Australia for its claims on 4G capabilities of the iPad.
And it is still not clear how much it may have to pay to Samsung in damages.
The Dutch court did not specify any amount, but the damages will be calculated based on sales of Apple’s iPhone and iPad in the Netherlands.
“Samsung welcomes the court’s ruling, which reaffirmed Apple’s free-riding of our technological innovation,” the South Korean manufacturer said.
“In accordance with the ruling, we will seek adequate compensation for the damages Apple and its products have caused.”
Apple has been ordered to pay damages to rival Samsung Electronics by a court in the Netherlands
Samsung had claimed that Apple had infringed four of its patents. However, the Dutch court said that only one of those had been breached.
Apple and Samsung are two of the biggest manufacturers of smartphones and tablet PCs in the world.
However, the two firms have been involved in dozens of patent cases and disputes relating to designs of their respective products.
Analysts said that with so many cases being fought by the two firms in different countries, neither of the parties may emerge as the overall winner.
Last month, a judge in the US ordered the chief executives of both the firms to meet to try to settle their legal differences.
But the talks did not lead to any agreement and Apple has since sought a ban on sales of one of Samsung’s tablet computers and the latest range of its Galaxy smartphones.
Apple had enjoyed an early lead in the smartphone and tablet PC market with the launch of its iPhone and iPad devices.
However, Samsung has been steadily increasing its market share in the sector with the introduction of new gadgets.
Analysts said that given the increased competition, the two firms had been using the legal battles as a way to stop each other from increasing their market shares.
“Given that they are number one and two in the market right now, they are going to use any possible tool to slow down each other and patents could be one of those tools,” said Melissa Chau of IDC Asia Pacific.
However, she said that given the amount of time, money and energy that the two firms have spent on fighting these cases, they were likely to find a solution in the long run.
“In the past, when we look at how these things have evolved, they get settled in due course of time and businesses move on.”
There was more bad news for Apple.
A court in Australia has ruled that the firm had misled consumers with its claims over the capability of the latest version of the iPad to connect to Australia’s fourth generation (4G) cellular networks.
The court said that Apple had broken the country’s consumer laws by implying that the newest version of the iPad could connect with the networks, when it could not.
“The conduct concerned was deliberate and very serious,” Justice Mordy Bromberg was quoted as saying by the AFP news agency.
“It exposed a significant proportion of Australian consumers of tablet devices to a misleading representation.”
In addition to the $2.3 million fine, Apple was also asked to pay 300,000 Australia dollars ($305,000) in court costs.
According to research firm Strategy Analytics, Samsung Electronics has overtaken Nokia to become the world’s largest maker of mobile phones.
Nokia took the top spot in 1998 from Motorola, but in the first quarter of 2012 Samsung shipped 93 million phones compared to almost 83 million by Nokia.
Samsung also reported its highest quarterly profit since 2008.
Net profit was 5.05 trillion won ($4.5 billion) in the quarter ending 31 March, up 81% from 2.78 trillion won last year.
Samsung is also the world’s biggest TV and flat screen maker.
“We cautiously expect our earnings momentum to continue going forward, as competitiveness in our major businesses is enhanced,” said Robert Yi, head of investor relations at Samsung.
Samsung said its IT and mobile communications division, which manufactures the smartphones, made an operating profit of 4.27 trillion won during the period, as revenues in the division surged 86% from a year earlier.
Samsung Electronics has overtaken Nokia to become the world's largest maker of mobile phones
Samsung will unveil the latest version of its Galaxy range of phones on 3 May.
The Galaxy range has been very popular and helped Samsung overtake Apple to become the world’s biggest seller of smartphones.
“The smartphone market has almost only two players, Samsung and Apple,” said Lee Sei-Cheol of Meritz Securities.
“Since its Galaxy3 phone is being unveiled in May, Samsung will keep enjoying sales growth in its mobile phone division.”
Global demand for smartphones is expected to increase further in coming years, with research firm IDC forecasting that global smart phone shipments will rise by a third to 659.8 million units in 2012.
Analysts said that given its robust growth and dominance in the sector, Samsung was well placed to benefit from this growth and boost its market share.
However, given the robust growth in the sector, other smartphone makers are also keen to introduce new products and tap into the fast-growing market.
Samsung is facing stiff competition from rivals such as US-based Apple, Finland’s Nokia, and Taiwan’s HTC.
Apple, which said earlier this week that it sold 35 million of its iPhones in the first quarter, is expected to launch a new version of its handset later this year.
Analysts said that as more models are launched, manufacturers may have to the cut price of their handsets in a bid to attract consumers, a move that may see profit margins shrink.
“Samsung’s handset earnings may weaken in the latter half of this year, with the possible launch of Apple’s iPhone 5,” said Brian Park of Tong Yang Securities.
Another area of concern for Samsung is likely to be its chip manufacturing unit, which has been hurt by slowing global demand for personal computers.
The firm is one of the world’s biggest makers of dynamic random-access memory (DRAM) chips, which are widely used in personal computers.
However, demand for these chips has been declining as consumers turn to tablet PCs, which mostly use flash memory chips.
At the same time, falling prices have also hurt profitability in the sector.
Samsung’s memory-chip division saw its profits slide by 54% during the first quarter when compared with the same period a year earlier.
The company said it expected the demand for DRAM chips to rebound in the coming months, but warned that growing competition in the sector “will lead to a price decline”.