Apple (AAPL) failed to reach a settlement with Samsung regarding patent disputes in the recently held off the court meeting. The meeting was arranged following the orders of the San Jose District Court judge Lucy Koh. However, the failure makes the March 31 patent-infringement trial inevitable now.

In an attempt to dominate the global smartphone market, both Apple and Samsung continue to fight each other over intellectual properties (IP). The fight dates back to 2011 when Apple accused Samsung of copying the iPad and the iPhone.

Samsung also alleged that Apple devices had violated its patents and in retaliation lodged a number of legal suits all over the world. The current patent infringement suit was filed by Apple, which claimed that Samsung devices such as Galaxy S III violated its technology.

We believe that a settlement would have benefited Samsung more than Apple. The iPhone maker currently has an upper hand in the legal battles as it has won a number of verdicts against the South Korean smartphone maker in recent times. Currently, Samsung owes more than $900 million to Apple as damages.

Though Apple seems to have emerged victorious, yet the fact is that the victory remains confined to the courtroom only. As per market research firm IDC, Samsung accounted for nearly 29% of the global smartphone shipments in the just concluded quarter whereas Apple’s share fell from 20.9% to 17.9% on a sequential basis.

Apple’s loyal customer base, international expansion, competitive pricing strategy and a solid cash position are expected to aid long-term growth. However, increasing competition from the likes of Google (GOOG), Hewlett-Packard (HPQ) and Microsoft (MSFT) in most of its major product segments, possible delays in product launch, higher operating expenses and increasing legal complexities are headwinds.

Currently, Apple has a Zacks Rank #3 (Hold).

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