Over the weekend, Apple and HTC announced a surprise settlement to their global patent battle, along with a 10-year licensing agreement that includes current and future patents held by both companies.
The terms of the settlement deal were not initially disclosed, but Sterne Agee analyst Shaw Wu reports hearing from multiple industry sources that HTC has agreed to pay Apple $6-$8 in licensing fees for each Android phone it sells. Wu estimates that could work out to be between $180-$280 million paid to Apple annually, given that HTC is expected to ship 30 million-35 million Android smartphones in 2013.
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While this might sound like a lot, Wu points out in his research note that it is comparable to the $5 that HTC reportedly pays Microsoft per Android device as part of a separate patent settlement.
“We think $6-$8 seems reasonable if not a relatively small price for HTC and others to pay to be able to sell a modern smart phone with touchscreen,” Wu wrote in the note.
Apple first sued HTC for infringing on patents related to the iPhone in 2010, as part of the so-called “thermonuclear war” against Google’s Android phones and its manufacturing partners declared by Apple’s former CEO and co-founder Steve Jobs’. Apple and HTC have since battled it out in court rooms around the world, with Apple winning multiple decisions.
After the patent settlement was announced late Saturday, an HTC spokeswoman told The Wall Street Journalthat she doesn’t expect the terms of the agreement to have an “adverse material impact” on HTC’s business. Wu argues that the settlement won’t likely have any material benefit on Apple’s business either, considering that $280 million annually is pocket change for a company that generates $193 billion in sales annually.
More important than the money, Wu speculates that the terms of this agreement could be used as a “blueprint” for Apple coming to similar settlements with other Android manufacturers, including Samsung and Motorola.
SOURCE:mashable
