Whether or not Apple is granted an injunction preventing Samsung sales in the U.S. doesn’t concern Wall Street. Following the iPhone maker’s patent-infringement win against the South Korean company, the real question is whether this causes consumers to pause.
“The key question is whether operators/customers will be willing to buy infringing Samsung handsets/tablets if there is risk they may have to stop selling them in the future,” writes Wells Fargo analyst Maynard Um. Indeed, Um sees the only risk now facing Apple is whether they’ll have enough iPhone 5 handsets to meet “unprecedented demand.”
If U.S. District Court Judge Lucy Koh stops Samsung’s U.S. sales of infringing smartphones and tablets, the move could provide Apple with “a significant additional royalty stream” of at least $250 million. Such a potential prompted Um to boost Apple share value to $740-$760, up dramatically from the previous $640 to $660 estimate.
Um’s opinion is not alone on Wall Street. Barclay’s Apple analyst Ben Reitzes told investors Monday the court ruling “marks an important victory for Apple against Android.” Reitzes said the win for Apple could be worth much more than the $1.05 million verdict.
“Competitors may now think twice about how they compete in smart mobility devices with the industry’s clear innovator. If Apple forces competitors to innovate more, it could take longer for competitive products to come to market, and make it more expensive to develop them,” wrote Reitzes.
Such a delay enables Apple to continue its current pricing and sell more devices. Apple could earn $17 billion to $18 billion more this year if it sells an additional 10 million iPads or 20 million iPhones without pressure to reduce pricing, according to the analyst. For investors, that means Apple shares gain $65-$80 in value.
Barclay’s continues its $750 per share price target on Apple stock.