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Samsung Shares Rally Despite Apple Lawsuit Announcement

Shares in Samsung Electronics closed up by nearly one per cent after suffering a dip during the day due to the announcement last night by Apple, that it was suing the Korean manufacturer for producing devices that look too much like its own.

More specifically, Apple is targeting Samsung's popular Galaxy and Galaxy Tab mobile and tablet range. While the value of Samsung shares has gone down since the 15th of April, it flatlined earlier today before picking up in the afternoon, ending the day at 875,000KRW, up by 0.92 per cent, leaving it well above its one year low of 735,000KRW.

Many analysts were quick to point out that although the lawsuit is likely to turn acrimonious between the two partners, their respective sizes compared to the rest of the market means that they are unlikely to end their current cooperation altogether.

Samsung is a massive provider of key components to Apple ranging from system on chips to flash memory, down to RAM and display.

And if there's one lesson that Apple has learnt with the chaos caused by the Japan earthquake last month, it is to diversify supply as widely as possible to prevent supply chain disruptions.

How will Apple proceed from here? It is unlikely that it will force Samsung to stop producing tablets and other devices, and Apple may well need the expertise of the Korean Chaebol to start producing its own televisions soon.