President Obama's trade representatives on Saturday vetoed an International Trade Commission ban on the iPhone 4 and iPad 2. The move impacted Samsung, costing the South Korean giant $1 billion in market cap in South Korean trading.
U.S. Trade Representative Michael Froman said the International Trade Commission overstepped its boundaries, and the ban gave Samsung "undue leverage" when it comes to rivals using standard technology.
The ban could have materially impacted revenue for Apple's fiscal fourth quarter, not something the tech giant needs given the negative sentiment on Wall Street right now. Analysts are expecting Apple to generate $7.66 a share in earnings on $36.13 billion in revenue. If the ban was not vetoed, perhaps we would have seen estimate cuts from analysts. Now that the ban has been vetoed, perhaps we see estimate raises from Wall Street analysts.This is just the latest in the patent battle between Apple and Samsung. Having Obama at the back of Apple, however, could wind up becoming an issue between the U.S. and South Korean governments, which may get even uglier than the patent dispute between the two companies. The South Korean government has already issued a statement expressing concern with the decision to veto the import ban, further adding fuel to this already blazing fire. Next up is the International Trade Commission's decision whether or not to ban certain models of the Samsung Galaxy following an earlier win by Apple which said that Samsung infringed on certain Apple patents. The South Korean government said it hopes "to see a fair and reasonable decision on the matter." Apple was originally awarded $1.05 billion in damages from the courts thanks to the ruling. Samsung uses Google's (GOOG - Get Report) Android operating system, and has overtaken Apple as the top smartphone seller according to IDC. It owned 41.1% of the market as of the end of the first-quarter, compared to 17.3% for Apple and its mobile operating system, iOS. Samsung is free to continue pursuing the patent rights through the courts, but for now, it's a blow for Samsung, and a coup for Apple. Apple shares were higher in pre-market trading, up 0.66% to $465.60.