HTC stops selling smartphones in U.K.; shares plunge

08/07/2019 02:47 PM
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Taipei, Aug. 7 (CNA) Taiwan-based smartphone brand HTC Corp. would not comment on a BBC report Monday that it has stopped selling its latest models in the U.K. market amid patent disputes there, but investors have reacted negatively to the news.

The news, combined with a nearly 70 percent month-on-month plunge in sales in July, sent HTC shares tumbling 7.95 percent to NT$33.00 (US$1.05) at the end of Wednesday, while the Taiwan Stock Exchange's weighted index was down 0.08 percent at 10,386.18.

HTC said the company takes intellectual property rights seriously and has launched an investigation into the charges.

"We are proactively investigating an infringement claim by a third party with respect to a single handset model. Out of an abundance of caution, we have temporarily stopped sales of other HTC smartphones in the U.K. while we verify that all handsets have the required workaround," HTC said in a statement.

"We will take the necessary steps to resume sales in due course," the statement said.

The company did not directly comment on the BBC report, however, and its website in the U.K. market and several distribution channels such as Carphone Warehouse, O2 and EE showed its products as being "out of stock."

The models HTC has stopped offering in the U.K. market include the Desire 12, the Desire 12+, U12 Life, U12+ and U11, but those models remain available in other countries, according to the CCB report.

The report said HTC has been long involved in a patent dispute with IPcom, a Germany-based IP licensing company, over a wireless technology developed for car phones.

Though its latest phone models have been pulled from the U.K. market, HTC continues to sell its 5G router and virtual reality headsets there, the report said.

Beyond the patent dispute in the U.K., HTC shares were also affected by the company's disappointing sales for July.

In a statement released Tuesday, HTC reported consolidated sales of NT$440 million for the month, down 69.8 percent from June, and also down 68.52 percent from a year earlier.

The July figure was the lowest since HTC listed on Taiwan's stock market in March 2002.

Analysts said HTC has been unable to find a niche for its products in the fiercely competitive global smartphone market, and its VR business has not been able to make up for the slumping phone sales.

The month-on-month dive in sales reflected a relatively high comparison base in June, when HTC's sales grew more than 90 percent due to an increase in shipments in 5G related products, new smartphone models and VR headsets.

In the first seven months of this year, HTC's consolidated sales totaled NT$6.19 billion, down 63.5 percent from a year earlier.

(By Jiang Ming-yan and Frances Huang)


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