HTC to pay licensing fees to Apple as part of patent settlement

HTC Corp. will have to pay licensing fees to Apple Inc. as part of the settlement of all of their patent disputes, a person familiar with the situation said Monday.

Past two years ago, HTC was the top Android-based smartphone seller in the U.S.. But it steadily lost market share in the fast-growing smartphone market as rivals Samsung Electronics Co. and Apple launched new devices that became more popular with consumers.

According to IDC research HTC share slipped from fifth to third quarter behind Chinese handsets by ZTE
Its share of the market was 4.0%, down from 10.3% a year earlier.
According to Barclays analyst Dale Gai.:
“HTC’s challenges remain and could get worse into 2013 from more competition,”

HTC’s One series smartphones launched earlier this year have failed to arrest its decline in market share. After the company guided for a razor-thin 1% operating margin for the current fourth quarter–which would be down from more than 12% a year earlier–some analysts are now predicting that HTC could post a loss. Last month, HTC warned that its revenue and margins will likely decline in the fourth quarter.

Still, HTC’s shares got a lift Monday from the ten-year global licensing agreement with Apple, which covers all present and future patents held by both companies. Despite little details on the deal, shares of HTC surged by their daily 7% limit in Taipei to 241.50 New Taiwan dollars ($8.30).