Apple and HTC end patent disputes

In a surprise truce in Apple's ongoing patent wars, the company has signed a 10-year licence agreement with Taiwanese smartphone maker HTC. HTC is thought to have paid Apple between $5 (£3.14) and $20 (£12.57) per handset that it produces using Android - Google's operating system. HTC say that the deal will not have a material affect on its profit-and-loss account.

The two firms have settled all their outstanding disputes over patents and signed a 10-year licence agreement that includes current and future patents held by one another. The companies had been suing each other for 32 months in Europe and the US, with Apple succeeding in temporarily preventing US imports of HTC phones.

HTC's has seen its sales tumble since the second half of 2011 as it struggles to emulate the success of its rivals. It expects sales to be lower than expected at the end of the year. Apple has been embroiled in a series of high profile patent cases all over the world as the dominant player and its rivals accuse each other of copying designs and ideas. Legal cases between Apple and Samsung have been filed in more than 10 countries, with each accusing the other of copying designs.

“For as long as Tim Cook has been CEO, Apple has been less interested in pursuing legal assaults against competitors, choosing increasingly to find ways to settle differences out of court,” said Carl Howe, an analyst at Yankee Group in Boston. “This settlement indicates a softening of Apple’s legal thrusts.” The companies declined to provide settlement details.

Settling with HTC may allow the world’s most-valuable company to focus its legal efforts on Samsung, the Suwon, South Korea-based maker of Galaxy handsets that’s now the world’s largest smartphone maker.

“Samsung is still going hard and has become an even bigger threat” since being sued by Apple, said Lee Seung Woo, a Seoul- based analyst at IBK Securities Co. Apple may have decided it achieved what it wanted by going after HTC because the Taiwanese company’s share of the smartphone market has weakened, Lee said.

In Britain a spat over a UK court decision that found in favour of Samsung has been ongoing for several weeks. Patents blogger Florian Mueller wrote that "If litigation is the question, licensing is, once again, the answer. The settlement is surprising and unsurprising at the same time. The timing wasn't expected since neither party had massive leverage over the other, but it makes a whole lot of sense that Apple would settle with HTC, and that HTC would accept the terms Apple has imposed (which were not disclosed but are likely somewhat onerous), prior to other Apple-Android settlements.

Mueller added that "Both companies simply have other priorities to focus on. For Apple, the competitive challenge it faces from Samsung and from Google's plan to use Motorola Mobility's patents to reach a point of mutually assured destruction are far bigger issues. If Apple wanted to be embroiled in litigation with a third Android device maker, HTC would no longer be the choice at this stage -- Amazon, for example, would be a higher priority. 

And while HTC didn't have to fear much from Apple's litigation in the nearest term, it probably knew that it couldn't win this fight in the long run, and it now needs to focus on its business. It recently lost market share and reported disappointing financial results. Google should finally recognize that Android devices need patent licenses, that Android is not free no matter how often Google says so, and that one Android device maker after the other will seek licensing arrangements with Apple, Microsoft, Nokia and other significant patent holders."

HTC, Samsung, Nokia on collision course with Windows Phone 8

Microsoft has launched a new version of its Windows Phone software with broad support from smartphone makers, cellphone carriers and app developers as the software company tries to position new Windows gadgets as strong alternatives to Apple and Android devices. The company also promised to address one of the chief shortcomings with Windows Phone: the dearth of third-party applications relative to offerings for Apple's iPhone and devices running Google's Android system.

Windows Phone 8 is the successor to Windows Phone 7, which launched two years ago but has had little traction in the market. The new software will run on more powerful phones with flagship models coming from Nokia, Samsung and HTC. Together, they'll launch eight Windows Phone 8 smartphones before the year is out. "People all over the world are about to fall in love with Windows Phones," Microsoft CEO Steve Ballmer said at the Windows Phone 8 launch event in San Francisco on Monday.

Microsoft said it will also catch up in offering third-party apps. There are 120,000 applications available for Windows Phone, but some apps that are popular on other systems are notably missing from Windows Phone because it can be hard to get developers interested in writing programs for a small number of smartphones.

Microsoft is patching some of those holes soon: Microsoft vice president Joe Belfiore said Internet radio service Pandora is coming to Windows Phone 8, along with games such as "Where's My Water?" Soon, he said, 46 of the 50 most popular smartphone apps will be available.

The company is also releasing an app for Skype, the Internet calling service it owns. The Skype app available for Windows Phone 7 was an unfinished, or "beta" version. The new Skype app will run in the background, listening for incoming calls without placing any drain on the battery, Belfiore said.

Microsoft scored a big endorsement from Verizon Wireless, the largest cellphone carrier in the US. It will carry three Windows Phones this holiday season, including its first Nokia phone in many years. Verizon executives have said that they want to see a viable "third ecosystem" alongside Apple's iPhone and Google's Android. Having more potential partners to work with provides the carriers with more leverage against each one and would make them less dependent on the whims of Apple and Google.

Microsoft released Windows 8 for desktops, laptops and tablets last week. That event was devoid of surprises, as Microsoft needed to work with hundreds of partners such as computer makers ahead of time.

Belfiore revealed that Windows Phone 8 will come with a "Kid's Corner" feature. If enabled, kids will be able to start up the phone from the lock screen, gaining access to apps and games that the phone's owner has designated as safe for them. Belfiore brought his three children on stage to demonstrate the feature. Actress Jessica Alba lent star power to the event, endorsing Kid's Corner as a "busy mom."

Owners will also be able link apps to their lock screen, giving them at-a-glance information such as sports scores. Windows 8 for computers has borrowed its look from Windows Phone 7, presenting applications not as icons but as "Live Tiles," which can be animated with data from the application. For instance, the "Pictures" tile shows a slideshow.

The live tiles and the distinctive user interface remain Microsoft's biggest selling points for Windows Phone. In terms of third-party applications and the features of the phones, it's mostly playing catch-up to the iPhone and Android. Microsoft will be emphasizing the consistent look across devices in a massive advertising campaign that will talk not just about its new software, but its venture in hardware manufacturing. On Friday, Microsoft released its first tablet computer, the Surface. "Between Windows 8, Microsoft Surface or Windows Phone 8, you won't be able to turn on the TV or open a magazine without seeing a Microsoft Windows ad," Ballmer said.