Last week, a federal jury in San Jose slapped a $ 1 billion fine on South Korea based Samsung Electronics Company after finding that it had illegally duplicated the features of the iPhone and the iPad, manufactured by Apple. While the focus was initially on Apple Inc.(NASDAQ:AAPL) and Samsung, the spotlight is now on a possible beneficiary, the mobile phone manufacturer Nokia, which produces Windows-based smart phones.
Nokia Corporation (ADR)(NYSE:NOK), the market leader in mobile phones for more than a decade, had relinquished its position and had even been overtaken by Samsung earlier this year. The iPhone and Android-based smart phones were proving to be stiff competition for Nokia and the San Jose verdict seems to be a godsend, especially considering the fact that chances of Nokia landing in a legal tangle with Apple are minimal, as the Windows phone has very little in common with the iPhone.
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The fact that Apple and Microsoft agree on a few patents further helps matters. Moreover, the indictment of Samsung is likely to deter other smart phone manufacturers too, which will surely benefit Nokia. HTC, LG and Motorola, now a division of Google are some of the other companies manufacturing Android-based phones.
Wall Street seems to concur with this opinion. According to Wunderlich Securities analyst, Matthew Robinson, this verdict and the possibility of punitive damages will put the brakes on Android innovations. However, Nokia’s advantage may be restricted to the U.S. as the chances of Apple filing lawsuits outside the country, against other Android-based phones are slim.
Shares of NOK are down 5.08% on profit booking after surging over 20% in the past one week.