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Shares of HTC plunge after patent battle setback

Shares of HTC plunge after patent battle setback

Taipei, Oct. 18 (CNA) Shares of Taiwan-based smartphone maker HTC Corp. took a dive in Tuesday morning trading after an initial decision made by the United States International Trade Commission found that Apple did not infringe on patents asserted by the Taiwanese company, dealers said. As of 11:27 a.m., HTC had fallen 4.85 percent to NT$706.00 (US$23.46) -- after hitting a low of NT$700 -- with 5.32 million shares changing hands, while the benchmark weighted index was down 1.71 percent at 7,333.45 points. According to the USITC initial ruling, an investigation found there was no infringement by Apple of four HTC patents that involved functions such as power management and phone dialing. The USITC is scheduled to release a final decision in February 2012. The initial decision came after the Taiwanese manufacturer filed a complaint against the U.S. consumer electronics giant in May 2010 as part of their escalating patent battle. HTC said it would appeal the initial ruling, adding that the company was well prepared to protect its intellectual property rights by using every legal means at its disposal. "The ITC ruling had an impact on HTC's share price today, while the broader market was affected by renewed fears over the European debt crisis," Concord Securities analyst Henry Sun said. Sun said the legal fight was a painful process for HTC and felt it would not be easy for the company to gain the upper hand against Apple, which holds a large patent portfolio. "So I'm not surprised by the ITC ruling at all. I think the current impact on HTC's share price is kind of psychological," he said. In fact, Sun said he was more concerned about HTC sales for the fourth quarter, a traditional peak season for the high-tech sector. "With falling global demand, I am afraid that the company will not reap the benefits from the peak season effect during the quarter as it has in the past," Sun said. In particular, Sun said, U.S.-based telecom operators Sprint and Verizon have defected to Apple, paving the path for slower sales in the U.S. market, which accounts for almost 40 percent of the smartphone company's total sales. In addition, Sun said the shutdown of part of the Suzhou facilities of Catcher Technology, a Taiwanese metal housing maker and an HTC supplier, is likely to affect HTC's production. "I expect sales of HTC for the fourth quarter to increase by 5 percent at the most from the third quarter, or even stay flat. It will be a lackluster performance for the quarter," he said. During the July-September period, HTC posted NT$18.64 billion in net profit, a quarterly high for the company. Its revenue totaled 135.82 billion, up 9 percent from the second quarter and also up 79.07 percent from a year earlier. (By Frances Huang)


Updated : 2021-10-22 04:14 GMT+08:00