Apple lawsuit fails to slow HTC smartphone sales

HTC predicted its second quarter revenue and shipments will hit record highs

Taiwanese smartphone vendor High Tech Computer (HTC) fared better than expected in the first quarter and forecast a record-breaking second quarter on Wednesday, showing that a patent lawsuit from rival Apple failed to harm its business.

HTC has so far seen "no immediate impact on our products, business and customers" from the Apple lawsuit, it said in a statement Wednesday. Apple filed the claim against HTC early last month, saying the company is infringing 20 Apple patents related to the iPhone user interface, underlying architecture and hardware.

The lawsuit had stoked fears HTC's business may be hurt as customers sought handsets from rival vendors instead of facing a potential import ban as a result of the suit.

Instead, HTC's first quarter revenue bounced back to year-over-year growth for the first time since the middle of 2009 and executives forecast both revenue and unit shipments will reach new historical highs in the second quarter, which ends June 30.

HTC's revenue reached NT$37.7 billion (US$1.19 billion) in the first three months of this year, up 19.3 percent from the first quarter last year. Net profit increased slightly to NT$5 billion.

The smartphone vendor forecast its revenue will grow to a record high NT$50 billion in the second quarter as handset shipments soar to 4.5 million units, also a new high. HTC's previous highs came in the fourth quarter of 2008, when its revenue was NT$47.38 billion on mobile phone shipments of 3.7 million units, a company representative said.

HTC has defended itself in the Apple lawsuit by pointing to its years of work in the smartphone industry and its own patent portfolio. The company shipped the first-ever Windows-based PDA in 1998, the first Windows phone in 2002, and the first-ever smartphone based on Google's Android mobile operating system in 2008. HTC opened in 1997, ten years before the iPhone debuted in 2007.

On Wednesday HTC also noted the strong performance of its line of smartphones that use Google's Android mobile operating system. "The initial 2009 Android portfolio has proved to deliver better sell-through as well as longer product life cycles, and we are confident our 2010 Android portfolio will drive momentum around the world," HTC said.

Some analysts say one reason behind Apple's patent suit against HTC was an effort to hurt the top seller of Android smartphones and slow down the uptake of the OS globally. HTC is the world's largest maker of smartphones based on the Android OS as well as the biggest maker of handsets that use Windows.

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