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Handset Makers Air Patent Grievances

Sarah Thomas
7/29/2011

More earnings, rife with patent talk, are in this week from High Tech Computer Corp. (HTC) (Taiwan: 2498), Samsung Corp. and Motorola Mobility LLC , shaking up the second-quarter handset rankings.

HTC isn't scared of an Apple: HTC doesn't expect its ongoing legal battles with Apple Inc. (Nasdaq: AAPL) to affect its business, the handset maker's CEO said Friday. In reporting its second-quarter earnings, CEO Peter Chou said the ruling by the U.S. International Trade Commission (USITC) that HTC infringed on two Apple patents won't have a fundamental impact on the company, which plans to appeal it. Chou also promised six to eight new revenue-driving product launches in the fourth quarter. (See Apple Wins Patent Victory Over HTC.) Samsung pleads the fifth: Samsung mobile device sales were up 43 percent over last year thanks in part to demand for its Galaxy S II smartphone. The South Korean vendor did not, however, reveal device shipment totals for the first time, citing "increased business risks" as the reason. The company didn't elaborate, but its ongoing legal battles with Apple could be to blame. (See MWC 2011: Samsung Revisits the Galaxies, Wireless Competition's Courtside Seats , Apple Sues Samsung for iCopying and Apple Escalates Samsung Lawsuit.)

Moto's patent pondering: Motorola Mobility is exploring its options with its portfolio of more than 17,000 patents, CEO Sanjay Jha told investors on Moto's second-quarter earnings call. Jha talked up the competitive importance of its patents after investor Carl Icahn urged the company to consider selling some of them, and he said the least understood and most underestimated part of its portfolio is patents related to Long Term Evolution (LTE). (See Moto Mobility Promises 5 LTE Devices for 2011, Moto Mobility Posts Q2 Loss, Beats Estimates and Moto Vs. Icahn 2: The Hunt for Patent Gold.)

"As I look at these patent portfolios, I feel very good that we will be able to go forward and find ways to create and enhance shareholder value for all of our shareholders," Jha said on the call according to a transcript.

Apple's 240 percent growth spurt: Apple has taken the crown of top smartphone vendor in the world after growing 240 percent in the past year. The company shipped 20.3 million iPhones in its last quarter, up from just 8.4 million a year ago, according to Strategy Analytics Inc. . Samsung actually outpaced the company, shipping an estimated 19.2 million smartphones last quarter, 620 percent year-over-year growth, earning it the No. 2 slot. Nokia Corp. (NYSE: NOK) slipped to third after a second-quarter loss, the analyst firm said. (See OS Watch: AT&T Outsmarts Verizon in Phones, Apple Posts Strong Q3 on iSales and Analyst: Nokia Faces Low-End Threat.)

Cheap phones make it big: Total handset sales to end users will reach 1.46 billion globally, representing annual growth of nearly 10 percent, Pyramid Research says. The growth will be driven by ultra-low-cost handsets, inexpensive smartphones and Android-based devices, primarily because 72 percent of new handset sales between now and 2015 will happen in emerging markets.

Even so, Pyramid projects that smartphone sales will account for 27 percent of total handset sell-through in 2011, doubling to 53 percent in 2015.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

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