Commentary: Will Apple soften its stance against Samsung after reaching peace deal with HTC?

Daniel Shen, Taipei; Steve Shen, DIGITIMES [Wednesday 14 November 2012]

The announcement of a comprehensive settlement of patent lawsuits between Apple and HTC comes as a surprise to the smartphone industry, given Apple's previous hostile attitude against alleged patent violators. But it remains to be seen whether the settlement signals a softening of Apple's stance against the Android camp.

HTC will certainly feel a relief that its almost 3-year dispute with Apple has been resolved, and it can now focus on innovation instead of litigation, as CEO Peter Chou has stated after reaching the agreement with Apple.

While financial terms of the agreement were not disclosed, some industry insiders estimate that HTC is likely to pay Apple a royalty fee of no more than US$5 for each smartphone sold under the cross-licensing agreement between the two firms.

In response to market speculations, HTC stated that the settlement will not affect its guidance and sales target set for the fourth quarter of 2012.

However, the impetus pushing for the truce apparently was not looking for cooperation opportunities between the two companies. Rather, the settlement seems to align the two vendors against their common rival, Samsung Electronics.

HTC was once the primary rival of Apple in the US and also a model firm from the Android camp, pushing Apple to take legal actions against the Taiwan-based comeptitor in order to thaw its sales momentum. 

However, Samsung has now replaced HTC as the largest vendor of Android phones and also has beaten Apple as the world's top smartphone vendor. Samsung has turned out to be a threat to Apple with regard to product roadmaps and marketing strategies.

Both Apple and HTC will benefit from the reconciliation, as Apple will be able to shift its resources to focus on litigation efforts against Samsung and other rivals from the Google camp, while HTC will be able to compete more freely in the marketplace leveraging on royalty payment. Additionally, Apple would also like to see HTC dent Samsung's market share.

But Apple may not take a similar approach to settle its patent disputes against Samsung or even Motorola Mobility due to different strategic positions of the two rivals.

Apple is unlikely to easily make a compromise with Samsung as it seeks to prevent Samsung, as well as the Android platform, from further expanding their share.