HTC Falls After Apple Sues to Block Imports of Phones
HTC Falls after Apple Sues to Block Imports of Phones (Update1)
March 3 (Bloomberg) — HTC Corp. fell the most in threeweeks in Taipei trading after Apple inc. filed a patent-infringement complaint seeking to stop imports of the company’shandsets running Google inc.’s Android software into the U.S.
HTC dropped 2 percent to close at NT$323.5 on the TaiwanStock Exchange, the biggest decline since Feb. 8. the benchmarkTaiex index gained 0.4 percent.
Apple said yesterday it filed the complaint with the U.S.International Trade Commission in Washington, claiminginfringement of 10 patents related to the implementation ofoperating systems. the complaint highlights intensifying rivalrybetween the maker of the iPhone and Google, whose Android phonesincreasingly challenge Apple’s $13 billion smartphone business.
“It’s a very good timing for Apple, as HTC’s new Androidphones about to launch are already receiving good reviews andorders from European operators,” said Lu Chia-lin, a Taipei-based analyst at Macquarie Group Ltd. who rates HTC“outperform.” “Operators are trying really hard to findalternative products to the iPhone.”
In a lawsuit filed in federal court in Wilmington, Delaware,Cupertino, California-based Apple claims infringement of 10other patents, including one for technology that lets peoplework the phone by touching the screen with their fingers.
Android models helped bolster HTC’s market share last year,making it the fourth-most popular brand for the devices afterNokia Oyj, Research in Motion Ltd. and Apple, according tomarket researcher Gartner inc.
Google Backs HTC
Taoyuan, Taiwan-based HTC declined to comment on thecomplaint, saying it needed time to examine the filings, LindaMills, a company spokeswoman, wrote in an e-mailed statement.
Google, owner of the most-popular Internet search engine,says it isn’t a party in either case. “However, we stand behindour Android operating system and the partners who have helped usto develop it,” the Mountain View, California-based companysaid.
HTC is the biggest maker of handsets using MicrosoftCorp.’s Windows and was the first to offer a handset based onthe Android operating system, releasing the G1 through DeutscheTelekom AG’s T-Mobile USA wireless unit. the company alsomanufactures Google’s first phone, the Nexus one.
HTC increased its share of global smartphone sales to 6.9percent last year, from 6 percent in 2008, Gartner said. Apple,in third place, expanded its share to 16 percent from 11 percent.
Apple also is embroiled in a patent dispute with Nokia, theworld’s largest maker of all types of mobile phones. Each hasaccused the other of infringing patents, and the ITC isinvestigating complaints that could result in import bans.
Steve Jobs, Apple’s Chief Executive Officer, in Januaryproclaimed the company to be the world’s biggest mobile devicemaker by revenue. IPhones, iPods and laptops made up most ofApple’s $15.7 billion in sales during the fiscal first quarterthat ended on Dec. 26, 2009, Jobs said at the time.
The conflict between Apple and Google is escalating as thetwo companies vie to control how people access the Internet whenon the move. Google is looking to smartphones to boost itsadvertising revenue, while Apple aims to position the iPhone,iPod and iPad devices as the platform of choice for movies,music, books and mobile Internet.
Previously Close Relationship
The previously close relationship saw the two companiescollaborate on map, search and mail functions for the iPhonebefore its release in July 2007. Google also made its YouTubevideo service compatible with Apple’s QuickTime player to makeit accessible on the device.
Google’s announcement of its Android operating system forsmartphones in November 2007 has put it in direct competitionwith Apple. the company in January began selling Nexus one, itsmost explicit challenge to the iPhone to date.
Android devices accounted for 12.4 percent of mobile Webbrowsing in North America in December, according to QuantcastCorp., a San Francisco-based research firm that measures databased on Web-publishing software. That compared with 65 percentfor the iPhone and 8.7 percent for Research in Motion Ltd.’sBlackBerry. Android surpassed the BlackBerry in November for thefirst time.
Bing Replacing Google?
Apple may counter by replacing Google as the default searchengine on the iPhone, a deal rumored to be worth $100 million toGoogle. two people familiar with the matter in January saidApple is in talks with Microsoft to use its Bing search engineand is also working on ways to manage ads displayed on itsmobile devices, in a move to challenge Google’s advertisingbusiness.
In November, Google announced plans to pay $750 million forAdMob inc., a mobile-phone advertising startup backed by SequoiaCapital, one of Google’s original investors. in January, Applesaid it bought Quattro Wireless, an AdMob rival.
The increasing rivalry led Google’s Chief Executive OfficerEric Schmidt to step down from Apple’s board in July afterserving for three years.
Apple’s litigation against HTC is “a warning shot”against its smartphone rivals,” said Alen Lin, a Taipei-basedanalyst at BNP Paribas SA. “The iPhone is still dominant in thesmartphone space.”
To contact the reporter on this story:Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net;Weiyi Lim at wlim26@bloomberg.net
Last Updated: March 3, 2010 02:22 EST
HTC Falls After Apple Sues to Block Imports of Phones
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