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Apple-Samsung verdict suggests tough battle ahead for HTC: analyst

Apple-Samsung verdict suggests tough battle ahead for HTC: analyst

Taipei, Aug. 27 (CNA) The latest setback of Samsung Electronics Co. in a patent infringement lawsuit against Apple Inc. suggests a tough battle lies ahead for Taiwan's HTC Corp. in its similar case later this year, a local analyst said Monday. On Aug. 24, a U.S. federal district court jury in California said Samsung will need to pay US$1.05 billion in damages after ruling that Samsung infringed on six of the seven contested patents by Apple, including both utility and design patents. The offending products include Samsung's major smartphones and tablets sold in the United States, with the exception of the flagship Galaxy S3 and Galaxy Note models. Jeff Pu, a Taipei-based equity research analyst at Fubon Securities, said it will be only a short-term relief to Samsung's rival HTC if Apple successfully bans Samsung's questionable devices from the U.S. market before a Sept. 20 hearing for the case. "We see increasing litigation risks for HTC, which should cap its multiple expansion," he wrote in a research note. "The Samsung/Apple case also suggests that HTC's upcoming initial ruling on Nov. 7 could be a tough battle for HTC," said Pu, who rated HTC "reduce" with a target price of NT$210 (US$7.01). Pu believed the industry landscape could be more unfavorable to the Android camp if Apple continues to file more patent infringement cases. These possible complaints could reduce the market visibility of Android phones or increase the cost structure of using the Android operating system via potential license fee payments, he added. Nevertheless, it is still too early to say whether the Windows platform will benefit or not, as most original equipment manufacturers are still uncertain about the user feedback and the Microsoft-Nokia tie-up, Pu said. Dale Gai, a Taipei-based analyst at Barclays Plc, said the jury verdict will be negative for HTC if the company is found to be in a similar unfavorable position for Apple litigation. "We believe that HTC could accelerate its negotiations with Apple to settle, leading to potential royalties for Apple but this would be negative for HTC's earnings," Gai said in a report. However, in light of the overhanging uncertainty of a Samsung sales ban in the U.S., HTC could have a short window to better compete in the U.S. market in the second half of 2012, he said. Shares in HTC fell 2.48 percent to NT$256 as of 11:33 a.m. Monday in Taipei. (By Jeffrey Wu)


Updated : 2021-06-24 11:41 GMT+08:00