HTC forced to delay launches in the US due to Apple
May 18th, 2012 - 09:17 am ET by C. D.
The Taiwanese manufacturer, confronted with a slowdown in activity, has to delay the launch of two new smartphones in the United States due to their ongoing litigate with Apple in front of the ITC. Shareholders haven’t taken the news well.
Various incidents continue to disrupt Taiwanese manufacturer HTC at a time when they are already under heavy pressure from Samsung in the Android smartphones market – HTC’s primary source of revenue.
After a difficult end to 2011, and first quarter or 2012 which is slightly tainted, they now also have to deal with Apple’s legal action. Apple has dragged HTC into a patent war to prevent them from deploying their strategy and taking on the US market.
These various elements have led to HTC having to delay the launch of two smartphones in the United States, with the HTC One X (quad core, unveiled at the MWC 2012 show in Barcelona at the end of February) and HTC EVO 4G LTE being blocked due to the ongoing legal action being heard by the ITC (International Trade Commission).
The Taiwanese manufacturer has taken measures to modify their handsets to avoid the legal action and being blocked by the ITC. The ITC then has to inspect the stock to ensure that everything is legal, with this step meaning that the launch has to be delayed (or in the case of the HTC One X, launched in early May, the shipment of additional handsets).
Besides the HTC/Apple quarrel, such delays are also affecting Samsung who regularly aligns their Android smartphones with Apple’s in all market sectors.
The delay is at this stage unknown and investors are worried about the effects that this could have on the second quarters financial results, with the third quarter potentially also to be affected.
The stock market reacted accordingly with HTC’s share price falling 6% immediately after the release of the smartphones sales report.
The US market is no longer as attractive to HTC as it was a few quarters ago, when the manufacturer controlled 50% of the smartphones market, although it is still a highly strategic market.