Is HTC the Ultimate Winner in Apple (AAPL) ITC Patent Ruling?
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Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 0.4%
Revenue Growth %: +15.8%
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Yesterday, the International Trade Commission (ITC) ruled in favor of Apple (Nasdaq: AAPL) in a patent dispute with HTC. But is the ruling really that severe?
Some speculate that it won't have a major impact on HTC.
To start, Digitimes notes that a check will industry sources has the scope of the patent violation on HTC as being rather muted, and import bans to the U.S. should also be less severe than expected.
The ITCs decision says HTC devices that violate Apple's patents will be banned from being shipped to the U.S. starting on April 19th, according to Digitimes' sources, basically giving HTC ample time to come up with new, non-infringing designs should they have nothing in the pipeline.
But, Digitimes' sources hint that it will not be difficult for HTC to come up with new product designs that won't infringe on patents. Further, the sources stated that HTC devices like the Nexus One, Touch Pro, Diamond, Tilt II, Dream, myTouch, Hero and Droid Eris, are already past their life-cycles, and due for an update anyway.
Separately, an analyst from Bernstein Research noted that HTC was only found to violate one patent of 10 originally cited in the case, and only two out of dozens of claims were upheld. Bernstein said the violation had to do with: "identifying special text strings in emails and on Web pages and initiating special actions when these text strings are tapped or clicked (in simple terms, making a phone number a hyperlink in a text and kicking off the phone dialer when the link is clicked)."
HTC also told the analyst several months ago that it had a plan to work around the results of the judgement, should they be unfavorable, right in-line with what Digitimes' sources have been saying.
Notably, HTC hasn't indicated which phones might meet the ban, to the list of devices is pure speculation on Digitimes part. HTC issued a statement that said it respects the ITC ruling, and will alter designs of devices that violate Apple's patents as soon as possible.
Apple is up about 0.4 percent ahead of the bell Tuesday.
Some speculate that it won't have a major impact on HTC.
To start, Digitimes notes that a check will industry sources has the scope of the patent violation on HTC as being rather muted, and import bans to the U.S. should also be less severe than expected.
The ITCs decision says HTC devices that violate Apple's patents will be banned from being shipped to the U.S. starting on April 19th, according to Digitimes' sources, basically giving HTC ample time to come up with new, non-infringing designs should they have nothing in the pipeline.
But, Digitimes' sources hint that it will not be difficult for HTC to come up with new product designs that won't infringe on patents. Further, the sources stated that HTC devices like the Nexus One, Touch Pro, Diamond, Tilt II, Dream, myTouch, Hero and Droid Eris, are already past their life-cycles, and due for an update anyway.
Separately, an analyst from Bernstein Research noted that HTC was only found to violate one patent of 10 originally cited in the case, and only two out of dozens of claims were upheld. Bernstein said the violation had to do with: "identifying special text strings in emails and on Web pages and initiating special actions when these text strings are tapped or clicked (in simple terms, making a phone number a hyperlink in a text and kicking off the phone dialer when the link is clicked)."
HTC also told the analyst several months ago that it had a plan to work around the results of the judgement, should they be unfavorable, right in-line with what Digitimes' sources have been saying.
Notably, HTC hasn't indicated which phones might meet the ban, to the list of devices is pure speculation on Digitimes part. HTC issued a statement that said it respects the ITC ruling, and will alter designs of devices that violate Apple's patents as soon as possible.
Apple is up about 0.4 percent ahead of the bell Tuesday.
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