Temperature in Hell Has Dropped–Apple and HTC Settle!on November 17, 2012 at 3:00 am
Apple is the forbidden fruit in the mouths of virtually everyone in the mobile device world. We have seen the company’s tireless crusade against Android manufacturers due to mainly Android’s ever increasing user base and Apple’s infinite claims that others steal their ideas. One of the longest battles in this saga has been against HTC, which has lasted almost 3 years—pretty much ever since Android was introduced into the world of mobile devices. Apple bombarded HTC with various patent claims, most of which were just being awarded at the time the lawsuit was being shelled out. This took a lot of people by surprise, although not entirely since Nokia and Motorola had suffered a similar faiths not too long before that. As you are all aware, this fruit company is still crusading against others, most notably against Samsung, which has taken stage across the globe.
Fast forward to middle of last week. News reported by The Guardian in the United Kingdom came out with a shocking, and I do mean shocking, turn of events. It turns out that only a few weeks before a hearing, Apple and HTC finally agreed on a licensing agreement, which would cost HTC somewhere between US$5 and US$20 per device sold. For HTC, this means no more blocked imports, no more having to look for work arounds for software functionality, and not having to reinvent the rectangle. They are free to make handsets and sell them throughout the world, so as long as they pay up on patents used/breached/copied (allegedly). However, as much as I would like to jump out of my chair in joy, considering how long this has dragged and that we finally see a light at the end of the tunnel, I cannot help to wonder if that light getting bigger and brighter is actually a train coming our way.
As this was brought to our attention by our friend and XDA Moderator Committee member wacky.banana, he raised a very valid and good point, which I hereby quote:
This agreement with Apple puts HTC’s price points, and therefore their potential profits, under huge pressure. Given their continuing underperformance and the fact that they have lost their way, how long do you think they will survive before some venture company comes in, buys them for a dollar then completely asset strips them before closing the whole lot down.
I am not a doomsayer by nature but HTC have a massive challenge on their hands. Oh, how the mighty have fallen.
The analysis itself is a little too bleak, but the main point is valid. HTC is now under a monumental amount of financial pressure, as they now have an added cost to their devices, which you can likely expect to see reflected in the price tags of future devices. That said, what arguments will HTC use when trying to explain to customers that their device prices are being raised? Unfortunately, as of late, HTC has lost substantial support from various groups, including many developers who were once loyal to the brand. The increasing lack of dev support has pushed many to others like Samsung and Sony, so there is lost ground from the start. On top of that, having reached an agreement points to the fact that they gave up on defending their own ideals and innovations. Now, from having followed this charade for over 3 years, we have learned a few things—one of which is that most patents that Apple is using against others are/should not be valid, let alone enforceable in court. So, HTC, you have, by throwing the towel, conceded to Apple and told them “you were right, sorry for using your stuff.” You have officially given them more of a case and precedents for other courts around the globe to consider when dealing with these matters.
One last point: Will this agreement cover current and future design considerations? The obvious reason for this is question is a simple. When you release something else and Apple claims it is theirs, will this little truce help? More than likely, the answer to this question is a resounding “no.” At that point, you will back yourself once again into a corner and shell out another $10-$20 per device once again. Where will it stop? Oh, I know! Wacky said it better. Maybe some small player will come and buy you off for a dollar. Hey! Guess what I just found under my seat? Maybe I will buy myself a Taiwanese company for Christmas after all.
You can find more information in the original article. Thanks for reading.
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[Thanks wacky.banana for the tip!]