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HTC shipments to the U.S. delayed due to import review (update)

2012/05/16 21:29:52

Taipei, May 16 (CNA) Taiwan's HTC Corp. said Wednesday that shipments of two of its flagship smartphones to the United States have been delayed because of an import ban on its products filed by the U.S. International Trade Commission (ITC).

"The U.S. availability of the HTC One X and HTC EVO 4G LTE has been delayed due to a standard U.S. Customs review of shipments that is required after an ITC exclusion order," the company said in a statement.

"We believe we are in compliance with the ruling, and HTC is working closely with Customs to secure approval," it added.

An HTC spokeswoman told CNA that the EVO 4G LTE is a new product and has not yet been officially launched in the U.S., while the One X is facing a supply shortage temporarily in the country due to the U.S. Customs review.

HTC products that are imported to the U.S. after April 19 will need to be checked by Customs for any patent infringement, but the company is not sure how long it will take to complete the review, she said.

In an ITC ruling in December last year, HTC was found to be in violation of an Apple Inc. patent involving data-detection technology. The company was given until April 19 to come up with an alternative or face a ban on U.S. sales of its handsets with the function.

HTC said the patent in question relates to a minor part of the interface and that the company will remove it from all of their phones soon.

"It's a surprise for HTC and its investors because there were no other cases like this before, implementing an import review after the products went on sale in the U.S.," said Jeff Pu, an equity research analyst at Taipei-based Fubon Securities.

HTC started shipments of the One X to the U.S. carrier AT&T Inc. on May 7, and it also began to receive pre-orders for the EVO 4G LTE on May 8 through another operator Sprint Nextel Corp., according to Pu.

He said if the review takes the usual two to three weeks, it will result in 3-4 percent drop in HTC's revenue in the second quarter.

If the review takes a month or longer, however, HTC's revenue will drop by 10 percent during this period, given that sales of the two models are projected at 1 million units in the second quarter, or 9 percent of the total shipments of 11 million units forecast for HTC.

Shares of HTC closed down 6.59 percent at NT$411 Wednesday on the local bourse.

(By Jeffrey Wu)