HTC told to halt sales in Germany but may ignore order

Smartphone maker HTC has been ordered to halt sales of its 3G devices in Germany by the patent owner Ipcom. However, the Taiwanese firm has indicated that it will not comply.
Smartphone maker HTC has been ordered to halt sales of its 3G devices in Germany by the patent owner Ipcom. However, the Taiwanese firm has indicated that it will not comply.
HTC said that Ipcom’s intellectual property claim had already been ruled invalid by the German Federal Patents court in December 2010. But experts say the case is not so clear cut and the firm could still be shut out of a market into which it sells over a million devices a year. The case relates to a wireless patent originally developed by the German conglomerate Bosch for use in a car telephone system. After exiting the sector the firm sold the rights to Ipcom in 2007.
Two years later the German firm Ipcom challenged HTC’s use of the technology in a court in the city of Mannheim, resulting in an injunction being placed on the Asian company. HTC appealed against the ruling – causing the enforcement order to be suspended pending the follow-up hearing. A judge had been due to reconsider the case at the start of this week, but HTC withdrew its appeal. Ipcom said it has now told HTC that it intends to enforce the ban.
“Since HTC has never come up with an offer that adequately reflects the value of these patents, Ipcom has been left with no choice – we will use the right awarded by the courts, likely resulting in HTC devices disappearing from shops during the crucial Christmas season,” said Ipcom’s managing director, Bernhard Frohwitter.
He added that if HTC ignored the order Ipcom would ask for the phone maker to be fined. “It’s up to the court and could go up to 250,000 euro (£213,000) per violation per phone,” Mr Frohwitter said.
He added that Ipcom was still willing to settle, providing HTC agreed to pay a “fair” licence fee. Ipcom said it had already struck licence agreements with other telecoms companies, but it was pursuing a related claim against Nokia.
A statement from HTC suggested that it did not believe it needed to meet Ipcom’s demands. “On November 25, 2011, HTC withdrew its appeal in the IPCom EP1186189 case, finding that the appeal had become redundant since the German Federal Patent Court had previously held the relevant claim of the patent to be invalid,” it said. But patent consultant Florian Mueller has cast doubt on this interpretation of the law in his Foss Patents blog.
He wrote that the Federal Patent Court ruling was itself the subject of an appeal, so it would not take force for approximately another two years. He added that if HTC had believed the claim was truly invalid it would have withdrawn its appeal at an earlier point. “A withdrawal so shortly before the hearing means to me that HTC was afraid of its expected outcome,” he wrote.
The research firm IDC estimated that HTC shipped 1.65 million devices to Germany in 2010, representing 16% of its smartphone market. It said the firm shipped a further 1.43 million mobiles in the first nine months of 2011, representing a 14% share.
While the loss of this market would prove damaging, one analyst said shareholders in HTC are much more concerned about another dispute in the US. “Investors are focused on Apple’s patent claims versus HTC. The next ruling in the case is due on 6 December,” said Adnaan Ahmad, global technology analyst at Berenberg bank. The US’s International Trade Commission issued a preliminary ruling against HTC earlier in the year. If the court maintains that view, it could impose an import ban. The US smartphone market is several times larger than that of Germany’s.
Confidence in HTC has already been knocked. The firm has cut sales forecasts twice over the past month citing tougher competition and the global downturn. Its shares have fallen more than 25% over the past fortnight.
HTC said it expected stronger demand in 2012, but analysts remain unconvinced noting a strong line-up from Samsung and the rise of other Chinese phone makers including ZTE and Huawei.
“Fundamentally product cycles can’t last forever unless you have your own ecosystem,” said Mr Ahmad. “HTC doesn’t have that as the Android ecosystem is owned by Google. HTC has 15% margins. How can that be sustained in such an uber-competitive industry?”

iPhone explodes on Australian flight


Passengers aboard an Australian flight were given a real fright when an iPhone inexplicably exploded, resulting in smoke inside the cabin and launching a million snide comments on tech blogs from iSceptics everywhere.

The handset, which was either an iPhone 4 or the new iPhone 4S, self-combusted inside a Regional Express flight LZ319 from Lismore to Sydney, causing the rear glass backing to shatter and a significant portion of the middle-right area to melt.

According to a media release by the airline, “a passenger’s mobile phone started emitting a significant amount of dense smoke, accompanied by a red glow”.

Luckily, the plane had already landed when the incident happened. A flight attendant successfully extinguished the phone and no one was injured.

It’s as-yet-unclear what caused the explosion. The handset in question has been sent to the Australian Transport Safety Bureau (ATSB) for analysis and an investigation will be underway by the Civil Aviation Safety Authority (CASA).

This is certainly not the first time an iPhone has exploded and while we don’t like drawing conclusions without evidence, it’s not beyond the realms of possibility that in the rush to meet continuous demands, some units, possibly the batteries themselves, were manufactured with defects.

The rare occurrence might not be cause for a total recall of iPhones. However, it is cause for concern nonetheless when it happens inside an airplane.

Apple has yet to comment on the situation.











Vodafone hit by £12bn Indian mobile phone bill

Vodafone’s turbulent Indian foray has cost the firm an estimated £12bn over four and a half years, research has revealed. It comes after the Indian government opened another front in its battle with the British mobile network by raiding its Mumbai and New Delhi offices at the weekend.

Vodafone’s turbulent Indian foray has cost the firm an estimated £12bn over four and a half years, research has revealed. It comes after the Indian government opened another front in its battle with the British mobile network by raiding its Mumbai and New Delhi offices at the weekend.
India contributes 8% of Vodafone’s revenues, and the company has 142m customers there, just 5m less than the entire European business. But after price wars and the cost of investing in its network, it has earned only £155m in cash from the country, according to analyst Mark James at broker Liberum Capital.
Set against the £10.4bn spent buying out the Indian operation’s previous owners between 2007 and this year, and the £1.7bn spent buying 3G spectrum in 2010, Vodafone is out of pocket to the tune of £11.9bn in India, where it is currently the third biggest operator.
India’s central bureau of investigations (CBI) raided Vodafone and rival Bharti Airtel’s offices on Saturday. It registered a case against the companies and two former telecoms ministry officials claiming “criminal conspiracy” in the granting of additional 2G spectrum.
“If you wanted an example of the uncertainty surrounding Vodafone’s investments in India, look no further,” James said in a note. “Subscriber growth has been matched by painful price wars between competitors, with Vodafone far from immune. Add constantly moving regulatory goalposts and a well-documented dispute with the Indian government and it’s not a given that Vodafone will ever see an economic return on the £12bn we estimate it has sunk to date.”
The case has dragged Vodafone into the scandal surrounding successive mobile spectrum sell-offs in India, which has seen former telecoms minister Andimuthu Raja remanded in custody, accused of taking bribes during the controversial 2008 auction of 2G airwaves. A state auditor has said the 2008 under-selling of licences for kickbacks – Vodafone has not been linked to that episode – may have cost $39bn (£24.9bn) in lost taxpayer revenue.
Announcing the new investigation, the Indian CBI alleged that officials and the companies involved deprived the public purse of $98m. The investigation covers spectrum awards between 2001 and 2007, predating Vodafone’s ownership of its Indian operation.
CBI investigators have seized documents from Bharti and Vodafone offices, and have questioned a former telecoms secretary, Shyamal Ghosh, and former deputy director-general of the department of telecommunications, JR Gupta. Both served under the former telecoms minister, Pramod Mahajan, who was killed by his brother in 2003.
There were suggestions in the Indian press that the case was politically motivated. It dates from a period when the Bharatiya Janata party (BGP) was in power. The BJP has been attacking the current administration for corruption.
Bharti denies any wrongdoing, and Vodafone said in a statement: “The historical events under scrutiny by the Indian CBI pre-date Vodafone’s acquisition, from Hutchison Whampoa, of our interests in India. We are co-operating fully with the Indian authorities and will provide them with the information available to us.”
Vodafone is already at loggerheads with Indian authorities, which claim it owes $2.5bn in tax and as much again in penalties on its 2007 acquisition of Hutchison Essar, a company which had its operations in India but its headquarters in the Cayman Islands tax haven. The case has led to a court battle in which Vodafone is accused of an “artificial tax avoidance scheme”.
A source at the CBI told local press: “Executives of both the companies will be questioned in some time. We have already questioned Ghosh and Gupta during the preliminary inquiry.”


O2 launches 4G network trial in London


O2 has announced it has commenced trialing the latest-generation 4G LTE network in the first-ever rollout in London.

The operator has installed 40 masts in a 40 square kilometer area in the capital, with up to 25 stations in the pipeline, for testing of the high-speed mobile on the 2.6GHz spectrum ahead of a planned nationwide launch in 2013.

“Today’s launch of the UK’s first 4G London trial network demonstrates our commitment to delivering 4G to our customers at the earliest opportunity,” said Ronan Dunne, Chief Executive Officer of Telefónica UK.

“The work we are doing now will lay the foundations for our commercial 4G network when it launches in the UK.”

At least 1,000 testers from industry partners such as O2 Arena and John Lewis, as well as readers of tech site Gizmodo, are taking part in the trial, which will last until June 2012.

O2 already has a 4G trial in Slough. BT and Orange are also conducting similar trials, with Three to follow suit shortly.

Participants are being equipped with 4G dongles, handsets and Wi-Fi hotspots, expected to provide speeds of up to 100Mbps. However, realistically users can at best hope for 30-40Mbps, which is the maximum received by 4G LTE subscribers in the US.

For the uninitiated, 4G is the fourth-generation network that succeeds the current 3G standard we already have in the UK. LTE stands for Long Term Evolution, which is one of several 4G standards currently available.












Malicious app penetrates iTunes store to test security


A malicious piece of software designed for iPhones and iPads has been created to show that Apple’s app store is not immune to malware.

The code was designed to look like a stock price tracker, but was also able to steal data.

Experts said that the proof-of-concept program was a “significant threat” to the app store.

Apple declined to comment. It also removed the app and barred the developer from its store.

The software was created by security expert and hacker Charlie Miller to demonstrate Apple’s vulnerabilities.

The firm accepted the program to its iTunes app store in September. Two months later Mr Miller revealed that it contained malware that could remotely download pictures and contacts.

“Until now you could just download everything from the app store and not worry about it being malicious. Now you have no idea what an app might do,” he said.

The InstaStock app took advantage of a recent update to Apple’s mobile operating system which allowed non-approved code to be added to installed apps for the first time. A few hours after Mr Miller disclosed the flaw, he received an email from Apple which said he was barred from the iOS developer program for violating its terms and conditions.

He wrote on Twitter: “First they give researchers access to developer programs, (although I paid for mine) then they kick them out.. for doing research. Me angry.”

Mr Miller has made something of a habit of exposing Apple’s security flaws. In 2009 he identified a bug in the iPhone’s text-messaging system that allowed attackers to gain remote control over the devices. He has since exposed other vulnerabilities in Apple’s Mac and mobile platforms.

Mr Miller plans to present his research at a security conference in Taiwan on 17 November.

The app he created was described as “the most significant threat yet to Apple’s app store economy”, by independent mobile analyst Ian Fogg. “Apple has been widely criticised for the way in which it limits what code developers can use but this suggests that it was probably right to do that,” he added.

To date Apple’s biggest security threat has been to the minority of its devices that have been modified. So-called jail-broken handsets appeal to more tech-savvy users who want to introduce non-Apple approved software to their handsets. However, many experts believe Apple’s app store is still more secure than many of its rivals’.

“The Android marketplace has a supply chain that is rather less controlled and therefore offers more potential to malware writers,” said Graham Titterington, an analyst with research firm Ovum. But he added that this malicious iPhone app could be “the first of many”.


LG signs deal with patent giant Intellectual Ventures

LG Electronics has become the latest smartphone maker to sign a deal with the patent house Intellectual Ventures.
LG Electronics has become the latest smartphone maker to sign a deal with the patent house Intellectual Ventures.
IV licenses out its huge library of innovation rights rather than using them to build products of its own. LG will be able to access IV’s patents to threaten counter-attacks against any firm planning an intellectual property lawsuit.
Industry watchers say other businesses are likely to strike similar deals over the coming years. “With companies claiming breach of patent across the board, firms can either defend every case that comes in or try to limit their exposure,” said Chris Green, technology analyst at Davies Murphy Group Europe. “Doing deals with big patent houses allows them to do the latter.”
The South Korean electronics firm was wounded in a previous patent battle. It had to pay Kodak $414m (£257m) in 2009 for infringing the camera maker’s digital imaging rights. “Our alliance with IV gives us access to patents outside our core and allows us the freedom to focus on what’s important in our industry – innovation,” said Jeong Hwan Lee, head of LG’s intellectual property centre.
Patent experts say the deal may allow the firm to become more adventurous. “LG now has the opportunity to leverage IV’s large patent portfolio and more aggressively expand product offerings in novel directions,” said Andrea Matwyshyn from the University of Pennsylvania’s Wharton School.
Intellectual Ventures’ was set up by Nathan Myhrvold, former chief technology officer at Microsoft. Over the past 11 years it has built up a portfolio of more than 35,000 patents covering areas such as text messaging and internet security. The firm has signed licensing deals with HTC, RIM and Samsung among others.
However, it has also filed lawsuits against Motorola, HP, Dell and Hynix Semiconductor alleging they have infringed its rights. “Its business model is that of an aggregator,” said Florian Mueller, a patent consultant whose clients include Microsoft. It acquires patents and does some R&D of its own. But the vast majority of its patents are bought on the secondary market, and its business model is to license them. But that’s not necessarily a bad thing if the technology involved is a legitimate innovation deserving patent protection.”
However, others are more critical of patent owners who sue others but do not produce their own goods, describing them as “patent trolls”. A Boston University study recently claimed such organisations add over $30bn in costs to industry each year and contribute little in return. However IV defends its business model.
“Our goal is to reach productive licence agreements that give our customers access to the patents that will help them minimise risk and stay competitive,” said Andy Elder, the firm’s executive vice president of global licensing.
“That’s especially important in crowded markets like the mobile industry. Litigation is an option we have, but we prefer to negotiate a licence that’s beneficial for both companies.”

BT under pressure to block The Pirate Bay

A coalition of Hollywood film studios, record companies and publishers has formally requested that BT block The Pirate Bay, one of the largest illegal filesharing sites in the world, after winning a landmark high-court ruling designed to enforce UK copyright law.
A coalition of Hollywood film studios, record companies and publishers has formally requested that BT block The Pirate Bay, one of the largest illegal filesharing sites in the world, after winning a landmark high-court ruling designed to enforce UK copyright law.
A coalition led by music industry body the BPI has written a letter to BT, the UK’s largest internet service provider with 6 six milllion customers, asking the telecoms company to block The Pirate Bay voluntarily.
Fronted by trade bodies including BPI, Pact, the Motion Picture Association and the Publishers Association – the coalition aims to force BT’s hand after last week’s high-court ruling last week set a precedent ordering it to block filesharing site Newzbin2.
Justice Arnold ordered BT to block Newzbin2, which Hollywood studios accused of promoting illegal filesharing “on a grand scale”, within two weeks, potentially opening floodgates for a wave of requests to block similar illegal download services. 

The coalition has requested BT block access to The Pirate Bay or, if it refuses to do so, consent to a court order.

A BT spokesman said: “We can confirm we are now in receipt of a letter from the BPI [ requesting that BT block the Pirate Bay site]. BT is considering its response. n line with the Newzbin judgment, a court order will be needed before any blocking could begin. BT is currently focused on implementation of that order.”
“Now that the high court has clarified the law, as a sector we need to keep up the pressure on these illegal sites,” said John Smith, general secretary of the Musicians’ Union.
Since 2009, a number of ISPs in other European countries, including Denmark, Ireland, Italy, Belgium and Sweden, have been ordered to implement blocking measures against The Pirate Bay.
The BPI chief executive, Geoff Taylor, said The Pirate Bay was “no more than a huge scam” defrauding the global creative sector. “We would not tolerate Counterfeits R Us on the high street – if we want economic growth, we cannot accept illegal rip-off sites on the internet either,” he said.

BT Vision becomes fastest-growing pay-TV service

BT Vision has become the fastest-growing pay-TV service in the UK, adding more customers in a quarter than BSkyB for the first time since launching more than four years ago.
BT Vision has become the fastest-growing pay-TV service in the UK, adding more customers in a quarter than BSkyB for the first time since launching more than four years ago.
The telecoms company’s pay-TV offering – which combines Freeview channels with sport, movies and on-demand content via broadband – said that the addition of the BBC iPlayer and a significant amount of on-demand content from major film studios had helped boost numbers.
BT Vision added 41,000 customers in the three months to the end of September, the most the service has attracted in a quarter for more than two years.
It also marks first time BT Vision has ever added more TV customers in a quarter than BSkyB since launching in mid-2007.
BSkyB added 26,000 pay-TV customers in the quarter to the end of September – well down on the almost 100,000 it reported in the same period in 2010 – while cable pay-TV operator Virgin Media’s total television subscribers declined by almost 6,000 in the period.
“It is the first time we have beaten Sky since launch and we have added more customers than both [including Virgin Media] combined,” said Marc Watson, chief executive of BT Vision. “It is very encouraging but we are not getting carried away. We are a young business with a lot to do.”
Virgin Media refuted the claim, arguing that it added 42,000 new TV customers to its TiVo service. While this is slightly ahead of BT’s growth rate, Virgin also lost customers in the third quarter, adding a net total of 28,800 pay-TV customers.
He admitted the growth is obviously from a much smaller base – BT Vision has 638,000 TV customers while BSkyB has more than 10 million and Virgin 3.76 million. Nevertheless, the addition of 41,000 represents a 6% increase on the 598,000 customers BT Vision reported at the end of June.
BT Vision’s subscriber numbers are also still some distance from early predictions of “2 to 3 million” originally set by former chief executive Ian Livingstone, but growth levels have picked up.
Watson said the growth in TV subscribers was down to doing the basics but better, including simplifying the packages on offer, improving the range of content and more marketing of the BT Vision service.
Earlier this year BT Vision introduced a basic tier charge of £4 a month – previously it had cost at least £7, usually more, to get a range of TV services – which Watson said has proved attractive, with many going on to take its “all you can eat” monthly option for £12.50.
Improvements to packages include launching a new subscription film service, which has partners including Warner Bros, Universal and Film 4, and on-demand TV channels from ABC and Warner Bros.

Watson said usage of video-on-demand services has seen explosive growth with viewers watching on average 46 or 47 programmes per month, on top of regular linear TV viewing.
BT Vision, which is part of the consortium of companies behind troubled broadband TV service YouView which aims to launch in April, added the BBC’s iPlayer service in the summer.

The company does not provide the level of customer metrics that BSkyB and Virgin Media do in their financial updates.
However, Watson said average revenue per user, a key metric in determining how much money a company is making from each customer, is “steadily going up over time”. “These are good customers we are acquiring,” he added.
Watson said the amount BT Vision is paying to attract each new customer is “where it needs to be” and that churn, the rate at which customers cancel subscriptions, is “improving”.
“All our key performance indicators are doing well and where we want them to be,” he added. “Our net additions [of TV customers], are growing steadily, we are getting traction and awareness in the marketplace.”

Android phones now owned by one in four Britons


Android phones dominate the UK smartphone marketplace, new figures reveal, capping a staggeringly successful 18 months for Google’s platform.

According to data from Kantar ComTech, 49.9 per cent of smartphones in the UK are Android phones. That compares with 22.5 per cent for BlackBerrys, and 18.5 per cent for Apple’s iPhone.

The surge in popularity of Android kits over the last 18 months means that one in four Britons now own a handset running the OS.

The platform’s rise and rise can be attributed to huge sales for the likes of Samsung’s Galaxy range and low-cost smarties, as well as a series of underwhelming efforts from BlackBerry-maker Research in Motion.

Also contributing to the changing landscape in the smartphone market was the late arrival of the iPhone 4S, which hit the market some four months later than expected.

Nokia was the biggest loser in ComTech’s findings, with the number of handsets sold rocking its largely abandoned Symbian operating system falling from 20 per cent to just six per cent over the last year and a half.