Samsung, Apple shares on split course amid patent war

Shares of Samsung Electronics Co. and Apple Inc., which used to move in the same direction, have parted ways over the last few months as their high-stakes patent row highlighted their rivalry over partnership in the mobile industry, a report showed Tuesday.

Samsung and Apple are each other's key competitors and partners in the mobile industry. Samsung supplies chips and displays for Apple gadgets, with Samsung parts comprising 26 percent of the component cost of the iPhone, according to Samsung's lead attorney Charles Verhoeven.

The close relationship and their dominant footing in the global IT industry had created a link between the course of the shares of the companies, but the report said this pattern is weakening amid the heated wrangling over patent infringement.

"The two companies were considered as 'complementary goods.' But the recent patent war has brought out the 'competitive' side of their relationship and weakened the correlation between shares," said Kwak Byung-ryul, an analyst at Eugene Investment & Securities Co.

The correlation between Samsung and Apple shares stood at 0.94 between January 2008 and August 2012, but has weakened to 0.75 this year, according to Kwak.

More recently, Samsung shares plunged 7.45 percent on Aug. 27, the first trading session after a U.S. federal jury ruled the South Korean tech titan infringed six of Apple's technologies. In contrast, Apple shares jumped 1.88 percent after posting a record intra-day high, cementing its place as the world's most valuable corporation.

Kwak attributed the decoupling between the two companies' shares to Samsung's growing market clout in the mobile device market, which highlighted their rivalry over the supplier relationship.

The South Korean tech giant beat out Apple as the world's top smartphone maker in the third quarter of 2011 thanks to robust shipments of its Galaxy devices.

In the April-June period, Samsung claimed 32.6 percent of the global smartphone market, far eclipsing Apple's 16.9 percent market share, according to market researcher IDC.

The analyst forecast the decoupling to continue amid Apple's bolstered check on Samsung and new product releases, such as the iPhone 5, the iPad mini and the Galaxy Note 2, which are likely to further fuel competition.

Nonetheless, investors point out while shares may part ways, the strong supplier relationship is unlikely to weaken for the time being.

"Apple needs strong suppliers," Ben Rogoff, who manages $1.3 billion in technology funds at Polar Capital in London, told Britain-based Telegraph.

"Apple needs to be careful what it wishes for. If this relationship deteriorated, you'd see Apple looking to diversify its supplier base, but that's hard to do."

Last month, Bloomberg reported that Apple's proposal to invest cash with Taiwan Semiconductor Manufacturing Co. had fallen through, stymieing its attempt to secure an alternate supplier. (Yonhap)