After a Month Delay U.S. Customs Lets HTC Handsets Trickle Through
May 21, 2012 12:04 PM
comment(s) - last by
Handsets were found to be compliant with ITC ruling, HTC revenue damaged by slow review
HTC Corp. (
) had some
to report Monday. Its handsets -- including the Evo 4G LTE and
the One X
-- finally began to be inspected and cleared
U.S. Customs and Border Patrol
I. HTC Handsets Finally Start to Pass Customs
HTC, based out of Taoyuan, Taiwan, has suffered deep losses to revenue at the hands of U.S. Customs. U.S. Customs
seized the handsets
after Apple, Inc. (
), a U.S. smartphone manufacturer,
won a preliminary injunction against HTC
U.S. International Trade Commission
. The injunction dealt with a single patent on "data-tapping" --
U.S. Patent No. 5,946,647
. Data-tapping involves converting strings such as phone numbers to actionable links.
The One X and Evo 4G LTE were shipped with a fix, which implement a new feature not found in Apple's iOS,
dubbed "App Associations
. Despite the workaround removing the infringing properties from core Android apps, the HTC handsets were held up at Customs for over a month, with the ban first taking effect on April 19.
With the leisurely pace of the review, HTC faced major revenue losses. The U.S. is HTC's biggest market, and the
world's second largest smartphone market
. HTC, like Apple, manufactures its smartphones in China. Some have suggested that U.S. manufacturing could be used as a workaround, but this would be problematic given HTC's minimal U.S. engineering presence and the cost of finding local plants and retooling them. Thus HTC remains largely at the mercy of Customs.
HTC One X == FREED
The company reported Monday, "Some of our products have passed the review and have been delivered to our telecoms operators’ clients in the US. The company is closely working with the US customs to speed up the review. The company is confident that the problem will be resolved soon."
II. Pressure is Growing For Customs to Avoid Lengthy Bans on Compliant Phones
U.S. Customs faced a lot of pressure to resolve the issue more expediently as news of the ban spread. AT&T and Sprint were both upset at the ban as they had already started preorders of the new HTC Android handsets. And blogs such as
obtained samples that showed that the infringing features were gone, raising further criticism of U.S. Customs' slow response.
The notoriously secretive and self-contained government agency is working to resolve the screening within 3 weeks, according to statements by HTC. This newfound speed may help to decrease financial harm to HTC, which
is already struggling
The relief is much needed -- Q1 2012 saw HTC handset sales plunge to 7.68m units, down from 9.3m units in Q1 2011. The 17 percent drop in handset shipment was largely
blamed on strong sales by Apple
and Android rival Samsung Electronics Comp., Ltd. (
Before the bad news of the ban HTC told analysts it was hoping to grow revenue by 55 percent in Q2 2012, to NT$105 billion ($3.55B USD). It is unknown how much the delay in shipments of flagship products might have cost HTC.
The timetable for a somewhat timely review/screening is good news for Android handset maker, Motorola Mobility Inc. (
) who is
facing an import ban
from Microsoft Corp. (
) in less than two months from now.
Unlike Motorola, which resisted Microsoft's licensing demands, HTC
an estimated $10 USD in patent protection money per handset sold. That licensing pact did not save it from an import ban, though.
HTC licenses Microsoft's patents, but was banned by Apple.
[Image Source: Asa Mathat/All Things D]
The ITC gives guidance to Customs based on exclusion orders. But according to ITC officials, Customs operates largely autonomously. While damaging Taiwanese phonemaker HTC might not have been a domestic problem, Customs faced scrutiny due to the implications for American telecoms. Customs will likely face even more pressure to give a timely review to Motorola, which is currently the largest American cellphone hardware designer after Apple.
This article is over a month old, voting and posting comments is disabled
Putting most of HTC's eggs in one basket
5/21/2012 4:41:30 PM
The U.S. is HTC's biggest market...
Reason why most well-respected investment people say "never put most/all of your eggs in one basket".
RE: Putting most of HTC's eggs in one basket
5/21/2012 5:53:51 PM
Some companies have no choice but to rely one one basket, wether of their choosing or not.
"We are going to continue to work with them to make sure they understand the reality of the Internet. A lot of these people don't have Ph.Ds, and they don't have a degree in computer science." -- RIM co-CEO Michael Lazaridis
Motorola Androids Banned in the U.S.; Samsung May be the Last Survivor
May 18, 2012, 7:00 PM
HTC Implements Workaround to Apple's Patent for Evo 4G LTE, One X
May 17, 2012, 4:35 PM
Game Over? Apple's Bid to Kill HTC Nears Fruition as ITC Blocks Imports
May 16, 2012, 11:35 AM
Quick Note: HTC Profit Officially Down 70 Percent, CEO Blames Apple
April 25, 2012, 10:26 AM
Android Titan HTC Tosses CFO Amid Continued Profits, Sales Plunge
April 17, 2012, 4:46 PM
Sony's Xperia Z3 Gets Detailed in Leaked Photos
July 25, 2014, 2:30 PM
Heavy Users of Verizon’s “Unlimited” LTE Data Could Soon See Targeted Throttling
July 25, 2014, 1:52 PM
Motorola Moto X+1 Makes Appearance in Leaked Photos
July 25, 2014, 12:06 PM
Sony Finally Adds 3D Blu-ray Support to PS4
July 24, 2014, 3:44 PM
IDC: Although Apple Remains at Top of Tablet Market, Share Falls from 33% to 26.9%
July 24, 2014, 1:24 PM
Thanks in Part to Strong G3 Launch, LG Sells 14.5 Million Smartphones in Q2
July 24, 2014, 10:18 AM
Most Popular Articles
Microsoft Kills Entertainment Unit, May Shelve Flagship Lumia "McLaren"
July 18, 2014, 7:40 PM
JJ Abrams Unveils X-Wing Starfighter for New "Star Wars" Movie
July 21, 2014, 12:24 PM
Ford Details ’15 F-150’s 325hp, 2.7L EcoBoost V6; Demonstrates 732-lb Weight Loss
July 22, 2014, 6:55 PM
Comcast Memo: Harassing Customers During Retention Calls Actually IS Our Policy
July 22, 2014, 5:19 PM
Motorola Moto G Successor Reportedly Uncovered, Moto X Discounted by up to $75
July 21, 2014, 1:11 PM
Latest Blog Posts
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information