(AAPL) Samsung Sues Apple in French Court

The legal tensions between Apple Inc. (AAPL) and Samsung Electronics Co. keeps intensifying, the latest development being that the latter has filed a case against Apple in a district court in Paris, France.

Samsung filed a compliant against the tech-giant, accusing Apple’s iPhones and iPads to have infringed on three technology patents relating to its UMTS (Universal Mobile Telecommunications System).

UMTS is a third-generation (3G) broadband, packet-based transmission of text, digitized voice, video and multimedia at data transmission rates of up to 2 megabits per second (Mbps). Samsung seems to have found a new way to counter Apple with this technology-focused lawsuit, since it has not won any of the design-related lawsuits that it filed against Apple. The development of this case will be an interesting event, as Samsung has opened up a whole new front in the war between these two companies.

Till now Apple seems to be in an advantageous position as it has successfully defended its design-related patent lawsuits against Samsung in several countries, where Apple has won an injunction to the sale of Samsung’s Galaxy Tabs and smartphones.

Of course, ever since Apple won an injunction against Samsung disallowing the sale of Galaxy tabs in Germany, the latter has been looking for all possible ways to challenge the ban. Apart from Germany, Apple and Samsung have locked horns in several counties that include the U.S., Australia, Korea, Japan, the Netherlands, Britain and now France.

Apple could be up against stiff competition in the tablet and smartphone markets from a number of companies, including Samsung, HTC and LG that have based their devices on Android, an open source operating system developed by Google Inc. (GOOG). However, Samsung’s Galaxy Tab is likely to be the strongest contender, so Apple’s success versus Samsung so far is reason to cheer.

Apple’s primary smartphone and tablet markets are very crowded, with the likes of Research In Motion Ltd. (RIMM), Hewlett-Packard Co. (HPQ), Dell Inc. (DELL), Samsung, Cisco Systems Inc. (CSCO), Toshiba and Acer gaining popularity in several international markets. However, so far Apple has managed to maintain its leadership position in the tablet market, and it enjoys a very strong position in smartphone markets as well.

Of course, as the outcome remains uncertain, impending lawsuits against several companies in different countries will remain an overhang on the stock going forward. However, positives can be derived from the various lawsuits that it has won in the recent past.

Apple’s ability to spur the popularity of the products in developing nations, where it is less successful, will help dictate the company’s fortunes in future.

We maintain our Neutral rating over the long term (6-12 months). Currently, Apple has a Zacks #2 Rank, which implies a Buy rating in the near term.

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