US Weather Not Looking Good for HTC

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The patent wars with Apple have made HTC slash the second quarter revenue predictions further in 2012. The outlook was changed to NT $91 billion from NT $93.6 billion while the gross profit has been revised to 27 percent from 29 percent. Consequently their operating margin has been will get to 9 percent from the previous prediction of 11.2 percent.

Why the prediction has been lowered?

The reason for the reduction in the Q2 predictions are seen as a result of two factors- lower sales in Europe than expected and the delay in the US shipments. The patent dispute with Apple and the following ruling by the International Trade Commission of the US delayed the launch of the HTC One X smartphones and the HTC EVO 4G gadgets as the shipments were stalled by US customs. However, the shipment delay of the mobiles was only temporary.

The Dispute

Apple opened the disputing way in 2010 as it accused HTC of violating about 10 Apple patents. In June last year the ITC pruned the allegation to only two violations and by December it was decided that there is only one violation. Anyhow, now the scene seems to have cooled down with subsequent ruling of the ITC that removed all restrictions on HTC.


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