HTC must modify a key technology in its Android smartphones or else face a potential sales ban in the US, according to The Wall Street Journal.
Citing information from "people familiar with the matter," the Journal said Wednesday that HTC has teamed up with chipmaker Qualcomm to try to revise certain chip technology in its HTC One and other new smartphones. The company is being forced to take such action after the US International Trade Commission (ITC) ruled last week that HTC violated two patents owned by Nokia.
One of the patents in question refers to the ability to remove errors in radio signals, while the second deals with different radio frequencies. The ITC is expected to make a full decision by January 23, giving HTC just under four months to make the necessary changes to its smartphones to avoid a US sales ban.
The patent case listed only older HTC smartphones. However, the HTC One and other newer devices use the same technology cited in Nokia's claim. Therefore, those phones would face the same ban if the ITC's current ruling is upheld in January, the Journal's sources said.
Fighting to compete against Apple and Samsung, HTC has seen its sales decline and could be hit by its first-ever loss for the September quarter. The company relies on the US for about 20 percent of its shipments, Barclays analyst Dale Gai told the Journal, so a sales ban would inflict further damage at a time when HTC is already struggling.
In response to last week's ITC ruling, HTC issued the following statement:
We are pleased to have a partial victory from the Administrative Law Judge's Initial Determination...and we look forward to a Final Determination by the Commission in favor of HTC on this matter. In the meantime, HTC will keep its alternative plans ready to ensure no business disruption.
What exactly is the "partial victory" claimed by HTC? Three patents were actually involved in the case, but the judge ruled that only two of them were in violation.
Updated at 11:15 a.m. PT on Oct. 2 and 7:15 a.m. PT Oct. 3 with more information from HTC.