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Henderson's Warmerdam: why I still back Apple and Samsung
by Dylan Lobo on Aug 29, 2012 at 07:48
Henderson technology specialist Ian Warmerdam has no intention on turning his back on the two sector giants after they became embroiled in a bitter patent war.
Warmerdam (pictured) made his comments after Apple won a lawsuit against Samsung last Friday relating to seven patents focused on the touch screen actions, the graphical user interface and the look and feel of devices.
The court ruled in favour of Apple on six of the patents, with Samsung ordered to pay a minimum of $1.05 billion in damages. On top of this, Apple is expected to pursue injunctions against the sale of several Samsung devices in the USA.
Warmerdam, who is overweight both stocks through his Citywire Selection Henderson Global Technology fund, which he co-manages with Stuart O’Gorman, told Wealth Manager Apple’s victory marks a significant development in the intellectual property wars between Apple and the Google-owned Android smartphone platform.
However, while Warmerdam described the victory as decisive for Apple, he highlights three reasons as to why the decision is unlikely to have any significant material consequence in the near term.
‘Firstly the decision applies only to the USA – a country where Apple has high market share already. Secondly, the potential injunctions do not apply (at this stage at least) to Samsung’s newest and highest selling devices (e.g. the Galaxy S3 and Note). Thirdly there is likely to be an appeal and thus many more months (years?) of legal wrangling,’ Warmerdam explained.
However, over the longer term Warmerdam said the decision could be more significant as it gives Apple momentum, although he admits with so much dependent on future court room battles it is difficult to make confident predictions.
He drew attention to a possible negative scenario of material deterioration in the quality of the Android user interface, although he suggested the chances of this were unlikely.
Apple’s patents include actions such as pinch to zoom which if removed might significantly impair user experience, Warmerdam said.
‘More likely perhaps might be the payment of royalties by Samsung and others in the Android camp to Apple for each device sold and/or increased focus on ‘work-around’ solutions for the various patent infringements.’
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