HTC initiated settlement talks with Apple after being hit with several legal setbacks, says source

“HTC Corp. will pay licensing fees to Apple Inc. as part of its settlement agreement with the U.S. company, a person familiar with the situation said,” Aries Poon and Lorraine Luk report for The Wall Street Journal. “It was unclear how much the Taiwanese smartphone maker would pay, but given HTC’s deteriorating financial position, analysts expressed concern about its long-term competitiveness.”

“HTC had said it didn’t expect the Apple agreement to have an adverse material impact on the Taiwanese company’s results. But analysts said the licensing payments are likely to squeeze HTC’s profit margins,” Poon and Luk report. “‘We suggest that investors refrain from chasing [HTC] based purely on the settlement,’ Deutsche Bank DBK.XE -0.31% Analysts William Yang and Ivy Lee wrote in a research note. ‘HTC’s near-term developments remain uninspiring.'”

Poon and Luk report, “The mood at HTC’s headquarters on Monday was one of relief, the person familiar with the situation said. He said HTC initiated the settlement talks with Apple after receiving several legal setbacks recently. A decision by the U.S. International Trade Commission had found that Apple’s iPhone and iPad mobile devices hadn’t infringed HTC’s patents. In a separate case, the ITC found that HTC’s phones infringed Apple’s patents.”

Read more in the full article here.

MacDailyNews Note: Our original Take regarding the settlement can be found here.

Related articles:
Analyst: HTC settlement worth up to $8 per phone for Apple; serve as model for future deals with Apple patent infringers – November 12, 2012
Apple and HTC settle global patent battle – November 11, 2012

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