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Company's CFO says new flagship LTE models will launch globally in 2012, restore sales growth

If there's one of the Android superstars that's stumbled in the last few months it's been HTC Corp. (TPE:2498).  Globally the Taiwanese phone maker has seen its pattern of quarterly growth come to an end.  Indeed, it predicted zero growth in Q4 sales, even as smartphone sales as whole continue to rise at a double-digit pace.

Chief Financial Officer Winston Yung brushed off the disturbing metric, commenting that HTC would overall show large growth from 2010 to 2011.  He explains, "I don't think it's so serious.  We have six quarters of improvement, the most conservative guidance is 45 million units of shipments this year, a lot higher than 25 million last year."

Investors apparently feel otherwise.  They've hammered HTC's stock 32.5 percent downwards since November 16.

The plunge is frustrating for the company as it comes not long after HTC received a happy surprise, finding itself topping American firm Apple, Inc. (AAPL) and South Korea's Samsung Electronics Comp., Ltd. (KS:005930) in Q3 2011 U.S. smartphone sales.  HTC's strong performance in the U.S. was not entirely unexpected, but its top position was a surprise.

HTC also faces legal woes stemming from its battle with Apple.  Last year it was the first Android phone maker to be attacked by attacked by Apple in U.S. court.  HTC filed a counter complaint to the ITC in May and Apple filed a second complaint in June.  Apple wants to ban all shipments of HTC smartphones into the U.S., the company's lone remaining bastion of strong sales.

On the legal front, HTC did catch a bit of a break, seeing a potential sales ban on its phones in Germany due to infringement of a patent from a firm called IPCom lifted when the patent involved was ruled invalid by the EU.

And HTC's Mr. Yung expressed confidence that upcoming brand new 2012 flagship models will right the ship for HTC.  He comments, "We will focus on the product next year, better and more competitive. Other than new LTE phones for the U.S. market, we also have phones for the global market. We will launch some worldwide flagship products. We're confident in them."

HTC will need to show proof of its turnaround if it hopes to slow its falling stock, which is being unloaded by foreign institutional investors.

Source: Reuters

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By psonice on 11/29/2011 5:09:52 AM , Rating: 2
Well, it's very complicated to work out the rights and wrongs of this. To be honest, I have zero issue with the idea of ipcom owning patents, and even getting HTC's phones banned - except for one very important point which I'll come to at the end. Here's why:

- The patent was originally applied for by Bosch. They DID do a lot of inventing, in fact some of the first mobile phones were made by them.

- The whole point of patents is that if I invent something and patent it, I should get the exclusive right to profit from my invention for so many years. That's my reward for all the hard work involved in inventing it.

- If some other company steals my idea and starts selling products using it, I should have some legal protection. Basically, I can either get their product banned, or I can license my work to them for a fee, which I set.

- Selling my patent on to somebody like ipcom? Licensing and enforcing a patent takes a LOT of money (as in millions!) and a lot of time and specialist knowledge. And inventor doesn't want to do that, they want to invent more stuff. And they likely don't have the resources to sue. So yes, it makes a lot of sense to sell the patent for a big cash sum, then get back to work.

So yeah, in theory a company like ipcom gets my full support. There's a lot of companies like this that ARE worth of respect too - it's just that some (like ipcom, lodsys and the like) behave unethically and get all the bad press.

As to why I think ipcom should be hit with a very large hammer on this one: the patent is a core part of the 3G spec. These patents HAVE to be licensed out for a fair fee, or the phone system stops working. ALL smartphones infringe this patent and require a license, not just HTC.

These patents are normally licensed under FRAND (where they're required to license, and at a fair price), and normally when a company like IPCOM tries to sue based on them the case gets kicked out and IPCOM would be told to license it. For some reason the german courts are ignoring that and are handing out bans instead.

"If you look at the last five years, if you look at what major innovations have occurred in computing technology, every single one of them came from AMD. Not a single innovation came from Intel." -- AMD CEO Hector Ruiz in 2007

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