Market watchers said HTC Corp (宏達電), the world’s fifth-largest smartphone maker, is in hot water, with such challenges as royalty payments and an injunction on phone sales, after the US International Trade Commission (ITC) initially ruled on Saturday that it had infringed two patents belonging to Apple Inc.
Shares of HTC closed down 3.97 percent to NT$871 on the Taiwan Stock Exchange yesterday, despite the company’s effort to buy back as many as 20 million of its own shares between yesterday and Aug. 17 and between Aug. 18 and Sept. 17, according to exchange filings made on Saturday.
“If Apple views HTC as one of its major competitors in the US market for high-end smartphones and leverages these legal tactics to seek royalty payments, this could raise HTC’s cost structure relative to Apple and other Android-phone makers,” Morgan Stanley said in a report yesterday.
There could be potential downside to earnings from next year onwards if HTC has to settle with royalty payments, it said.
The move could adversely affect HTC in its pursuit of a greater market share if other Android makers are not required to pay the same royalties as HTC, the report said.
The ITC will make its final ruling in December — with Citigroup saying on Sunday that the ITC’s initial verdicts have seldom been overthrown at the final rulings in the past, and HTC is expected to reach a settlement with Apple by then, or — in the worst case -scenario — face a US sales ban of its phones.
About half of HTC smartphones are shipped to the US — its anchor market.
Morgan Stanley said US operators’ attitudes would also be key to HTC’s legal battle.
HTC, the world’s largest maker of smartphones running on Windows and Android platforms, has a good rapport with long-term US partners, including Verizon and AT&T.
“[It will depend] whether these operators are content to have limited choices on smartphone selection; if not, eventually this is also a question as to whether HTC and other Android device makers could pass on higher costs to customers to mitigate the impact on margins,” Morgan Stanley said.
HTC may have to increase phones’ selling prices if it is paying Apple royalties.
On Saturday, HTC maintained that it was confident about its ownership of patents and was appealing against the ruling. Earlier this month, the company announced it was purchasing S3 Graphics Co, a graphic chip designer in the US, for US$300 million in a bid to obtain all of S3’s patents, including two which the ITC recently ruled that Apple had infringed upon.
HTC is expected to utilize S3’s patents to bargain with Apple in the legal battle, analysts said.
“We do believe that it will be very difficult for Apple to block HTC in the US unless Apple can work around S3 Graphics’ patents, which seems unlikely based on the information we have,” Citigroup analyst Kevin Chang (張凱偉) said in a report on Sunday.
Citigroup believe Apple would try to avoid using HTC’s S3 Graphic patents in its new A6 processors and take advantage of new patent lawsuits — which it lodged against HTC early this month — to further block HTC sales in the future.
This new round of suits may take the ITC another 12 months to settle, Chang added. The ITC’s ruling on Saturday was based on complaints Apple filed in March last year.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained