HTC settlement may pay Apple $8 per phone, act as blueprint for Samsung & Motorola

Posted:
in General Discussion edited January 2014
Apple's out-of-court settlement with rival smartphone maker HTC is expected to give Apple a net licensing fee of as much as $8 per phone, and may also serve as a blueprint for future deals with Samsung and Motorola.

Analyst Shaw Wu with Sterne Agee spoke with industry sources who led him to believe the Apple-HTC settlement will result in a net licensing fee of between $6 and $8. With HTC expected to ship between 30 million and 35 million smartphones in 2013, that would result in annual revenue of between $180 million and $280 million for Apple.

"This is apparently lower than the range AAPL initially proposed," Wu wrote in a note to investors on Monday. "But to put this in context, this compares to press reports indicated HTC pays (Microsoft) $5 per phone running Android."

While as much as $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.

HTC One X

HTC's flagship HTC One X smartphone. | Source: HTC


Wu believes the settlement will serve as a blueprint for Apple's ongoing lawsuits with Samsung and Motorola. He thinks Apple is likely closer to a settlement with its rivals, and the terms of the HTC deal could help Samsung and Motorola also reach similar agreements.

"We think 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," he said. "Prior to the iPhone and iPad, there were arguably no products that were close in functionality and appearance."

It was announced over the weekend that Apple and HTC had settled all of their patent litigation. The two rival companies also agreed to a 10-year patent licensing deal.

Details of the settlement remain secret, but the 10-year deal is expected to prevent any future suits between the two smartphone makers.
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Comments

  • Reply 1 of 44
    Could pay for the increase in costs for CPU orders!
  • Reply 2 of 44
    [QUOTE]Wu believes the settlement will serve as a blueprint for Apple's ongoing lawsuits with Samsung and HTC.[/QUOTE]

    This makes no sense. I think you meant Samsung and Motorola.
  • Reply 3 of 44

    Quote:


    HTC said its licensing payments to Apple would have "no material impact on the finances of the company".


     


    http://edition.cnn.com/2012/11/12/business/apple-htc-patent/index.html


     




     


    Can't be all THAT much.

  • Reply 4 of 44


    It just keeps getting more expensive to use a stolen product. Whoever said crime didn't play? Whoever said theft was free? image

  • Reply 5 of 44

    Quote:

    Originally Posted by Tallest Skil View Post


    It just keeps getting more expensive to use a stolen product. Whoever said crime didn't play? Whoever said theft was free? image



     


    trolltalk, galbi, droid, etc.

  • Reply 6 of 44

    Quote:

    Originally Posted by PhilBoogie View Post



    Could pay for the increase in costs for CPU orders!




    LOL, this is exactly what I was thinking!

  • Reply 7 of 44
    hmmhmm Posts: 3,405member

    Quote:

    Originally Posted by Tallest Skil View Post


    It just keeps getting more expensive to use a stolen product. Whoever said crime didn't play? Whoever said theft was free? image





    Ugh.. seeing as you take a strong stance against trolling, you should avoid it yourself. The entire stolen product notion here is ridiculous. Patent infringement isn't the same thing as theft. It's just being construed in a ridiculous manner here.

  • Reply 8 of 44
    @tallest skil : >"crime doesn't PLAY"
  • Reply 9 of 44


    Originally Posted by hmm View Post

    The entire stolen product notion here is ridiculous. Patent infringement isn't the same thing as theft.


     


    Well this might cause some cross-thread mayhem, given that the VirnetX trial thread was all about this.

  • Reply 10 of 44
    rayzrayz Posts: 814member


    You see that's the difference between Apple and Microsoft; Microsoft goes about this much more quietly.

  • Reply 11 of 44
    paxmanpaxman Posts: 4,594member
    rayz wrote: »
    You see that's the difference between Apple and Microsoft; Microsoft goes about this much more quietly.
    Yeah, we'll, Apple was never really known for 'quietly'. And they don't wear suits.
  • Reply 12 of 44

    Quote:

    Originally Posted by Rayz View Post


    You see that's the difference between Apple and Microsoft; Microsoft goes about this much more quietly.



     


    Um... analysts reported about the Microsoft deal.


     


    Now analysts are reporting about the Apple deal.


     


    This isn't an Apple press release... this is Shaw Wu talking to "industry sources."  The exact same as they did with Microsoft.

  • Reply 13 of 44
    rayzrayz Posts: 814member

    Quote:

    Originally Posted by bobringer View Post


     


    Um... analysts reported about the Microsoft deal.


     


    Now analysts are reporting about the Apple deal.


     


    This isn't an Apple press release... this is Shaw Wu talking to "industry sources."  The exact same as they did with Microsoft.



     


    I'm speaking generally. The whole Apple infringement thing is way too loud. I wanted  to know how Microsoft managed to creep around the tech sector, extracting royalties from the Android OEMs and telling them what functions they could include on their phones the (including Samsung) - all without raising a ripple.


     


    The answer is of course, Windows. 


     


    Many of the companies who make Android phones also make Windows computers. The last thing they want is to risk a sudden and hefty increase in Windows licensing fees. And the rest can't afford a long drawn out battle.

  • Reply 14 of 44
    hmmhmm Posts: 3,405member

    Quote:

    Originally Posted by Tallest Skil View Post


     


    Well this might cause some cross-thread mayhem, given that the VirnetX trial thread was all about this.





    Well regarding that I dislike software patents regardless of who owns them. Code is protected by copyright and NDAs. In the VirnetX filing, it looks like they did have R&D invested. I'm not sure whether their R&D shortened the cycle for Apple and Microsoft, but I really do dislike things that are easily infringed upon unknowingly. It's a complex topic either way, but I've never described it as "theft" regardless of the identity of the plaintiff.

  • Reply 15 of 44
    galbigalbi Posts: 968member

    Quote:

    Originally Posted by pedromartins View Post


     


    trolltalk, galbi, droid, etc.





    Thank you for acknowledging me amongst all the others. I'm flattered. You will see me more often. :D

  • Reply 16 of 44
    jd_in_sbjd_in_sb Posts: 1,484member
    The ground at Alta Mesa cemetery just moved ever so slightly.
  • Reply 17 of 44
    $280 M is no chump change. At least it pays for all the lawyers fees. Additionally, moving forward it would all go to the bottom line since there would be little related expenses. This increases margin.

    There is an interesting take here:

    http://seekingalpha.com/article/999901-apple-s-victory-over-android-what-does-it-mean
  • Reply 18 of 44
    gatorguygatorguy Posts: 20,452member

    Quote:

    Originally Posted by farkas View Post



    $280 M is no chump change. At least it pays for all the lawyers fees. Additionally, moving forward it would all go to the bottom line since there would be little related expenses. This increases margin.

    There is an interesting take here:

    http://seekingalpha.com/article/999901-apple-s-victory-over-android-what-does-it-mean


    No matter what your position is, there's almost always an a guest post at SeekingAlpha to support it. You'll find advice and "well-supported reasons"  to dump Google or Apple as only going down from here, right alongside another article giving you solid facts backing their best days being ahead of them.

  • Reply 19 of 44
    rayz wrote: »
    You see that's the difference between Apple and Microsoft; Microsoft goes about this much more quietly.

    APPLE didn't say any of this. A d-bag hit whore analyst talking out of his lower orifice based on zero facts said this. For attention etc. blogs pick up this caca because all things Apple get hits. That's why they drop phrases like 'iPad killer' in headlines for non Apple items -- hit whoring.

    Microsoft is no less frequent in the law cases, etc but they don't get the blogs hits. So unless the sitecan shoehorn an Apple reference in the headline there is less posting. That's all.
  • Reply 20 of 44


    "May" pay up to 8$ a phone?  It's probably closer to the 5$ paid to Microsoft (HTC after all, does have a few patents that could be useful to Apple), but regardless, it's a huge softening of Apple's stance, and the 10 year agreement, combined with the MS agreement, means HTC has nothing to worry about for a long time (except their sub-par marketing anyway).  


     


    Anyhow, HTC's stock was up the maximum allowed on the Taiwanese market last night, most investors see this news as being great for HTC.  Not to mention, HTC just released a 1080p smartphone in Japan, and are about to release it here.  Could be a good holiday season for HTC.  

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