Download Literature Review to Technology and the Stock Market

PRINCE MOHAMMED BIN FAHD UNIVERSITY
Literature Review to
Technology and the Stock
Market
Apple and Samsung
11/26/2012
Done by:
Laila AlOmran 200900296
Hind AlEssa 200900886
Bodour AlShaikh 200900334
Done for:
Investments
Dr. John Kuforij
The technology industry has increased rapidly in the few past years, causing a boom in
tech stocks prices. People now rely on technology in almost everything they do, from spelling
checks, to saving phone numbers, and now even trading in the stock market. Technology is
necessary in our daily lives. Firms today compete to serve the best programs and devices to ease
peoples’ lives to generate profit. The two leading firms this quarter of year 2012 are Apple and
Samsung.
According to Time magazine, Initial Public Offering of technology companies has
increased year 2011. U.S faced a drop in overall IPO, which has resulted in tech IPO having the
larger market share. On year 2010, 19% of IPO were tech and on year 2011, it rose to 32%
(Wolverson, 2011). Market Analysts believe that a new bubble tech bubble is forming. The
research question was formulated to question the fact of whether technology growth will keep
going or will it burst in the near future?
One of the main causes behind technologies fall is bad reputation. As an example of a
bad reputation, Samsung and apple lawsuit, it started when apple claims Samsung for copying
their design patent on the Iphone. As history shows that Samsung did not really have touch
screen before apple invention of Iphone touch. Therefore, since January 2007 Samsung
smartphones started to copy Iphone touch screen. Also, they copied their Ipad design and
features for Samsung galaxy tab (Sid, 2012).
Apple and Samsung verdict run with the result, after a recompense of 1 billion dollars in
court (Kravets, 2012). Mentioning that, the Android will easily cost apple more than 1 billion
dollars in sales (John C, 2012). The South Korean electronic stocks decreased 7.5 percent, that is
approximately 12 billion dollars lose of market value. In contrast, in early trading apple shares
went up 2.3 percent. Nokia the unstable phone maker also, moved upward in market share, the
reason behind Nokia not getting affected by the lawsuit between Apple and Samsung is, they did
not rely on android system. In result, united states the largest global market phones stopped
selling Samsung smart phones, as a result of the lawsuit (Kravets, 2012).
According to a marketing executive, Park SooGeong, Samsung is well known and widely
brand that is respected by the Asian, Asians believes that Samsung had been more innovation
than apple with cheaper devices, that are basically similar to apple’s products but with half of
apple prices. (Pheneah, 2012)
A China-based Smartphone use, Fu Dan, expressed his fears and main concern that apple
will become a monopoly and because of the verdict, the consumer options will become limited;
at the end customer will not win and putting Samsung at lower position (Pheneah, 2012).
Samsung copies many of the iPhone components and designs therefore; a technology
columnist said “I consider this situation to be dire for Apple”. When Iphone 5 arrives, it will be
crunch time for the company, if this is the end of the line for the iPhone” (John C, 2012).Said
Park Hyun from local brokerage Tong Yang Investment “Apple may be the pride of the United
States and Americans. But when you think about real economic effects, you can’t say Apple is
better than Samsung,’’ (Bobby, 2012). Mark Newman a Senior Analyst, Global Memory &
Consumer Electronics at Sanford C. “Samsung's stock is cheaper and therefore more attractive”
(Roshan, 2012).
Technology today plays a huge role in our everyday life resulting in a high demand for
the latest technology. Moreover, the leading firms such as Apple and Samsung even other
technology companies stocks are very high relative to other stocks in the market, but will it
continue to increase or is it just a boom? Analysts argued on this matter and have not yet reached
a conclusion.
References:
Apple's lawsuit against Samsung.(2012, 7 4). Retrieved from
http://www.ijailbreak.com/iphone/apple-vs-samsung-lawsuit-explained-in-three-images/
Dewitt, P. (2012, 7 27). Apple v. Samsung: What the analysts are saying. Retrieved from
http://tech.fortune.cnn.com/2012/08/27/apple-v-samsung-what-the-analysts-are-saying/
Dvorak, J. (2012, 7 28). Why apple actually lost to Samsung. Retrieved from
http://www.pcmag.com/article2/0,2817,2409010,00.asp
Kravets, D. (2012, 7 27). Who cheated whom? Apple v. Samsung patent showdown explained.
Retrieved from http://www.wired.com/gadgetlab/2012/07/apple-v-samsung-explained/
Vaswani, R. (2012, 7 21). Is samsung a better bet than apple?. Retrieved from
http://www.cnbc.com/id/48734291/Is_Samsung_a_Better_Bet_Than_Apple
Wolverson, R. (2011). New Tech Bubble?. Time, 177(24), 18.