HTC May Pay Up To $8 Per Phone as part of Settlement with Apple
Analyst Shaw Wu of Sterne Agee recently spoke with industry sources who led him to believe the Apple-HTC settlement will result in a net licensing fee between $6 and $8. HTC is expected to ship between 30 million and 35 million smartphones in 2013, resulting in annual revenue of between $180 million and $280 million for Apple.
In a note to investors, Wu wrote that “this is apparently lower than the range AAPL initial proposed. But to put this in context, this compares to press reports indicated HTC pays (Microsoft) $5 per phone running Android.” Although $280 million in revenue might be a big deal for most companies, that amount is likely to be “immaterial” to Apple, given that investors expect it will secure $48 billion in net income in fiscal 2013.
The settlement serves as a blueprint for Apple’s ongoing lawsuits with Motorola and Samsung according to Wu’s beliefs. He thinks Apple is likely closer to a settlement with its rivals and the terms of the HTC deal could help both Motorola and Samsung reach similar agreements. Wu thinks “it is fair that AAPL will get some licensing revenue for the intellectual property it has developed (in particular multi-touch gestures) in making the modern smartphone and tablet with touch screens. Prior to the iPhone and iPad, there were arguably no products that were close in functionality and appearance."
For those of you who didn’t already know about it, Apple and HTC announced this past weekend
that they had both settled all of their patent litigation. The two rival companies also agreed to a 10-year patent licensing deal. Details of the settlement remain a secret but the 10-year deal is expected to prevent any future suits between the two smartphone makers. We’ll have to see if the deal holds up and if the deal helps Apple reach similar conclusions with other tech giants as well.