No threat from injunction: HTC

IT WASN’T US::HTC Corp yesterday said it was not sued by Nokia and foresaw little impact on its production and revenue from an injunction awarded against STM

By Helen Ku  /  Staff reporter

Fri, Apr 26, 2013 - Page 14

Taiwanese smartphone vendor HTC Corp (宏達電) yesterday said an injunction ruling by a Dutch court earlier this week would not prevent it from continuing using microphone components already purchased from STMicroelectronics NV (STM).

On Monday, Nokia Oyi said it was awarded a preliminary injunction by the Amsterdam District Court in the Netherlands to prevent STM from selling key microphone components to HTC.

To ease market concerns about potential component shortages at the company, HTC said in a statement yesterday that it was not the object of the lawsuit by the Finnish handset maker, but STM was, because it was violating a one-year exclusively supply contract with Nokia.

“Nokia has not obtained an injunction in the Netherlands, or anywhere else, against the HTC One,” HTC said in the statement. “The Dutch proceedings were brought by Nokia solely against STM. HTC was not sued by Nokia in the Netherlands.”

In addition, Nokia’s attempt to obtain a recall of STM’s products sold to HTC had failed, the statement said.

The Taoyuan-based company said it would follow the court’s ruling and transition to improved microphone designs once its inventory of STM microphones is exhausted.

JPMorgan Securities yesterday said it expects HTC’s revenue in the second quarter to show limited impact from the injunction. Instead, the company could still achieve about 50 percent quarterly revenue growth this quarter, thanks to the higher than expected average selling price of the HTC One, JPMorgan analyst Alvin Kwock (郭彥麟) said in a report.

HTC may even achieve 80 percent to 100 percent quarter-on-quarter revenue growth if the microphone sourcing issue can be resolved quickly, Kwock said.

Goldman Sachs said it believes the microphone issue will have no material supply-side impact on HTC’s shipments. Goldman Sachs analyst Robert Yen (嚴柏宇) said in a report that HTC should be able to find a back-up solution immediately from its other microphone suppliers, with similar product quality.

Meanwhile, HTC said on Wednesday it was “delighted” after a German court dismissed another patent infringement complaint brought against it by Nokia.

The District Court of Mannheim in southwest Germany on Tuesday dismissed the complaint on a patent regarding “a communication network terminal for accessing the Internet” and awarded HTC legal costs, the company said.

Last month, the same German court also dismissed two patent complaints filed by Nokia against HTC and awarded the Taiwanese firm legal costs.

HTC shares closed up 1.26 percent at NT$282 yesterday.

Additional reporting by CNA