HTC has shown willingness to negotiate with Apple over recent patent rulings.
CFO Winston Yung suggested that HTC is willing to begin dialog and has even gone so far as to mention that the companies have talked informally prior to the rulings.
This sudden civil position comes as a shock to those of us who have been following the case closely. HTC had just acquired S3 Graphics in a move that many saw as a direct effort to strenghten its patent positions against Apple. S3 Graphics had previously won a similar patent suit against Apple, so the move pseudo made sense.
Shares of HTC tanked by nearly 10% following this acquisition.
It’s pretty obvious that this is do or die time for HTC. The Taiwanese manufacturer is already forced to pay $5 in patent fees to Microsoft for every Android phone they sell. This fee was settlement for HTC installing Android, which is based on Linux. Microsoft holds several patents that they claim were violated in the writing of the Linux kernel. Incurring any more of these fees could spell disaster for the company.
History of HTC
Founded in 1997, HTC originally began manufacturing notebook computers. Within the first year, however, Taiwan based HTC was cranking out some of the world’s first touch screen cell phones. Doing so positioned them as an innovator in the space.
The initial HTC phones were mostly based on Microsoft’s Windows Mobile platform. They have since made a major shift to Google Android as their main operating system, though a few Windows Mobile 7 devices have begun to hit the market.
Recently, HTC has been plagued by patent suits, and is struggling to convince investors that they can remain profitable and innovative.
We will have to wait and see if HTC leverages its new acquisition against Apple during negotiations.
There is one thing we know for sure: It can’t hurt to own a company that once defeated Apple in court, especially over a nearly identical patent suit.