Apple, Ericsson end legal battle with new patent licensing agreement
Swedish telecoms firm Ericsson announced a fresh patent licensing agreement with Apple on Monday, finally resolving a year-long legal fight between the two companies.
Ericsson didn't identify the exact terms of the deal, but the company's revenue from intellectual property in 2015 -- including the new Apple deal -- is expected to reach between 13 to 14 billion crowns, or $1.52 billion to $1.64 billion, Reuters reported. That's an increase from 9.9 billion crowns last year.
An investment bank, ABG Sundal Collier, estimated that Apple is being charged 0.5 percent of the revenue from iPhones and iPads. Since the company pulled in $32.2 billion in revenue from iPhones during the September quarter alone, that could translate into hundreds of millions of dollars per year.
Ericsson's chief intellectual property officer, Kasim Alfalahi, said that the licenses covered 2G, 3G, and LTE cellular connections.
"It means we can continue to work with Apple in areas such as 5G radio network and optimization of the network," he commented to Reuters.
Apple initially sued Ericsson in January, claiming excessive royalties on some of Ericsson's LTE technology. The situation quickly escalated, with Ericsson unleashing lawsuits and U.S. International Trade Commission complaints. By May, Ericsson had opened several European lawsuits as well.
Ericsson didn't identify the exact terms of the deal, but the company's revenue from intellectual property in 2015 -- including the new Apple deal -- is expected to reach between 13 to 14 billion crowns, or $1.52 billion to $1.64 billion, Reuters reported. That's an increase from 9.9 billion crowns last year.
An investment bank, ABG Sundal Collier, estimated that Apple is being charged 0.5 percent of the revenue from iPhones and iPads. Since the company pulled in $32.2 billion in revenue from iPhones during the September quarter alone, that could translate into hundreds of millions of dollars per year.
Ericsson's chief intellectual property officer, Kasim Alfalahi, said that the licenses covered 2G, 3G, and LTE cellular connections.
"It means we can continue to work with Apple in areas such as 5G radio network and optimization of the network," he commented to Reuters.
Apple initially sued Ericsson in January, claiming excessive royalties on some of Ericsson's LTE technology. The situation quickly escalated, with Ericsson unleashing lawsuits and U.S. International Trade Commission complaints. By May, Ericsson had opened several European lawsuits as well.
Comments
Used car deals for electronics.
Still good free money for doing nothing really. good things these patents aren't exactly new so it isn't "eternal".
Yes, applying this to the margin of the phone is absurd and this has got to the stop in general.
In what other industry does that happen!! So, if you're brand you built for 100 years allowed you to make 99% margin, the widget maker makes money off that!! Crazy.
Considering these things should already been covered by buying from Qualcom, this is even more absurd.
There is no advantage really for staying with Qualcom if they can just take the licenses they need and develop their own and pay the same amount.
They'll even pay less probably the way this shakedown is occuring.
Regardless, it's fair to say Apple won this round. It was Apple who first Ericsson sued over high royalty rates, and if they didn't get a good deal then they would just continue with the court case.
On the other hand, I have zero tolerance for those egregious cases of copying finished products, including the UI. Those cases should be subject to stiff penalties with the finished value being basis for proscribed penalties.
You have any source that shows Apple is paying a different royalty rate for each device? I didn't know the details for the licensing agreement were public.
Apparently that's how they structured their licenses in the past.
You do actually realise what Ericsson does these days?