John Paczkowski

Recent Posts by John Paczkowski

HTC Deal Brings Apple Profit and Maybe a Blueprint for Other Android Manufacturers

When Apple announced its settlement and a global licensing agreement with HTC this weekend, it declined to disclose any terms. But industry sources say the deal may be a fairly lucrative one for the iPhone maker.

In a note to clients Monday, Sterne Agee analyst Shaw Wu said he’s hearing that Apple will collect between $6 and $8 in licensing fees for each smartphone HTC ships in 2013. While I can’t confirm the accuracy of Wu’s report, sources I’ve spoken to suggest that they’re in the ballpark — “an above-average guess,” as one quipped.

So if we take that $6-$8 figure at face value and apply it to the 30 million to 35 million handsets HTC is expected to ship next year, Apple stands to nab between $180 million and $280 million in licensing fees. Which isn’t a huge sum for a company sitting on approximately $121 billion in cash, but it’s something. And more importantly, it may set a precedent for how Apple settles similar IP battles in the future. Certainly, that’s Wu’s take.

“With both Samsung and Motorola still under litigation with Apple, the big question is whether they are closer to a settlement,” Wu wrote. “We think the answer is yes and the terms set with HTC could at least provide a blueprint. We think it is fair that Apple will get some licensing revenue for the intellectual property it has developed in making the modern smart phone and tablet with touchscreens.”


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December 29, 2013 at 2:12 pm PT

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