Shares of HTC jump after the settlement of patent issues with Apple

HTC Corp.

HTC Corp.

Shares of HTC Corp. sparked on 12th of November by the daily permitted limit after the HTC patent settlement and the 10 year licensing HTC-Apple agreement thereby allowing the company to focus its attention on the development of its products. The HTC patent settlement will definitely help the struggling Taiwanese smartphone maker to revive the status of the company in the global smartphone market.

The Report:

The HTC- Apple agreement and the HTC patent settlement will definitely provide a short term boost for the company according to experts, but its results in the long run will depend solely on the ability of the company to produce competitive devices. Analysts also added that the future products of the company would decide whether the company would be able to revive some of its shares from the market that it lost to rivals like Samsung Electronics Co. of South Korea and Apple Inc.

Current market status:

Shares of HTC Corp. started at the maximum allowed limit of approximately 6.9 percent remaining there for sometime in the broader market that had once fell by roughly 0.15 percent. Shares of HTC Corp. grew strongly by roughly 24.5 percent from a closing low that it reached nearly two weeks ago. That was the lowest value reached by shares of the company since the year 2005, a time when the company had not even transformed itself from being an unknown contract maker to a top brand of smartphone producer in the global market. Moreover shares of HTC Corp. still stay approximately 80 percent below the record high that was reached by the company in the month of April.

The settlement of the patent wars and its effect:

The HTC patent settlement and the licensing HTC- Apple agreement that came to a conclusion on the 10th of November finally ended one of the main conflicts on the patent wars. The California giant and the iPhone maker had incidentally sued HTC in the year 2010 taking its first legal step against the producer of smartphones that used the Android operating system from Google Inc. As it was underlined by the analyst with Gartner C.K. Lu ,the licensing HTC- Apple agreement would definitely be helpful for the future of the smartphone maker. The HTC patent settlement will supposedly have a positive effect on both Google Inc. and Apple Inc. since they are now finally free from the knot of the constant patent wars. Neither of the companies was ready to disclose the terms of either the licensing agreement or of the settlement, but according to HTC Corp. the agreement will in no way hurt its finances or change its guidance in the fourth quarter. According to estimates of the company that were revealed in October, the fourth quarter revenue of the company would supposedly go down from a figure of T$70.2 billion in the third quarter to T$60 billion. HTC Corp. is said to have a gross margin of roughly 23 percent and an operating margin of nearly 1 percent in the last quarter.

Aubrey Chang
Aubrey Chang, Associate Editor Industry Leaders Magazine (www.industryleadersmagazine.com)

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