With just a day to go for Apple's (Nasdaq: AAPL) Wednesday event, at which the Cupertino, Calif.-based technology giant is likely to unveil the next-generation iPhone, widely referred to as iPhone 5, confirmed reports have emerged that South Korean handset manufacturer Samsung (Korea SE: 005930) is contemplating legal action against Apple over reported use of long-term evolution, or LTE, connectivity technology.
The report gains credence especially since both smartphone manufacturers are engaged in high-pitched patent trials across several countries. Reports claimed that the new iPhone would support LTE.
"It's true that Samsung Electronics has decided to take immediate legal action against the Cupertino-based Apple. Countries in Europe and even the United States -- Apple's home turf -- are our primary targets." a report published in Korea Times stated, quoting industry sources.
A report published on CNET notes that Apple may be at a disadvantage with regard to LTE as a U.S. International Trade Commission judge hinted that the technology giant may not be able to persuade him that a pair of HTC patents relating to 4G LTE technology must be invalidated in a case that lead to an import ban on the latest iPad and the upcoming next-generation iPhone.
The LTE-enabled smartphone market has proved highly beneficial for Samsung as the Galaxy S3 smartphone reported 20 million unit sales within 100 days of its launch; the Galaxy S3 is remarkably faster than the Galaxy S and Galaxy S2, Korea Times noted.
Though previous reports emerged that Samsung will strike back over LTE patents, Apple seems to be under significant pressure to release an LTE compatible handset. Though it was widely believed that the previous iPhone model, the iPhone 4S, would debut with 4G LTE technology, it featured HSPA+, a slightly faster technology than 3G, but a distant cry from 4G, which can be 10 times faster.
Meanwhile, Apple shares closed down Sept. 10 at $662.74, losing $17.70, about 2.60 percent lower than the previous close.
In a related development, MarketWatch has noted that investors who took the long-term position on Apple have fared well over the last five years, but timing trades to launch of popular products is a bit dicey.
Shaw Wu, an analyst with Sterne Agee, has noted that investing in Apple around launch events depended on the time horizon an investor had on the company. For those focused on short- or middle-term trades, predictions are challenging, given the volume of hype surrounding new products and the big run for the stock this year. "There's been such a huge move already [that] there may be some near-term profit taking on the shares, like we saw [Monday]," Wu told MarketWatch in an interview.
"For long-term investors, now is as good a time as any," Wu said, adding that the price target for the shares was $780. "We think the stock has more upside from here."
Samsung shares closed flat Sept.10 at 1,256,000 KRW.
To contact the editor, e-mail: