Thu, May 17, 2012 - Page 12 News List

HTC phones denied US entry

PATENT WARS:HTC has taken a pummeling in its war with Apple over patent rights, its stocks falling 11.47 percent this year despite a 4.58 percent rise in the local bourse

By George Liao and Lisa Wang  /  Staff reporters

Smartphone maker HTC Corp (宏達電) said yesterday two of its popular phones had been denied entry to the US market because of alleged violations of patents held by Apple Inc.

The company said the incident was caused by an import ban on its products after the US International Trade Commission (ITC) ruled late last year that the Taiwanese company had infringed on a key patent that Apple acquired in 1999.

“The US availability of the HTC One X and HTC EVO 4G LTE has been delayed due to a standard US Customs review of shipments that is required after an ITC exclusion order,” HTC said in a statement.

HTC said it believed its product design did not infringe on the patent and that it would challenge the ITC ruling, adding that it was cooperating with US customs to speed up the review process.

“We believe we are in compliance with the ruling and HTC is working closely with customs to secure approval,” the company said in the statement.

An HTC spokeswoman said EVO 4G LTE is a new product and has not yet been officially launched in the US, while the One X is facing a supply shortage temporarily in the country due to the US customs review.

HTC products that are imported to the US after April 19 will need to be checked by US customs for any patent infringement, but the company is not sure how long it will take to complete the review, she said.

Shares of HTC fell 6.59 percent to close at NT$411.00, the lowest since Dec. 9, data from the Taiwan Stock Exchange showed.

So far this year, the stock has dropped 11.47 percent, underperforming a 4.58 percent increase for the TAIEX over the same period, as HTC competes with Apple and Samsung Electronics Co and continues the patent dispute with Apple.

“The US customs move came as a surprise. And the delay in shipments will significantly impact HTC’s second-quarter revenue,” Jeff Pu (蒲得宇), who tracks handset industry for Fubon Securities (富邦證券), said by telephone yesterday.

HTC’s revenue would be about 10 percent to 15 percent less than its original forecast for this quarter, Pu said.

Last month, HTC said it expected revenue to grow 55 percent quarterly to NT$105 billion this quarter.

“Demand for the HTC EVO 4G LTE and HTC One X look strong. Those two phones have been well-received by the market,” Pu said.

The HTC One series is the handset maker’s flagship model this year.

US customs normally takes between two and three weeks to complete such reviews, Pu said.

The US market, HTC’s the biggest revenue source, is expected to make up between 35 percent and 40 percent of HTC’s total revenue this year, he said.

On May 7, HTC reported that sales last month fell 19.87 percent from a year earlier to NT$31.03 billion and that accumulated sales in the first four months dropped 30.84 percent from the year before to NT$98.82 billion.

Additional reporting by CNA

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