Apple to Get $6 - $8 from Every HTC Smartphone After Settlement

Apple Set to Get from $180 to $200 Million from HTC in Annual Fees

by Anton Shilov
11/14/2012 | 10:09 AM

Apple and HTC did not announce any terms of their settlement, but analysts believe that the former will get from $6 to $8 in licensing fee from every handset sold by the latter. While for a typical company that would mean a substantial improvement for earnings, for Apple that will be immaterial, given its financial situation.

 

“Financial terms were not disclosed but we believe Apple is likely getting a net licensing fee due to its much stronger patent portfolio and we think position as undisputed inventor of the modern smart phone with touchscreen,” said Shaw Wu, an analyst with Sterne Agee, in a note to clients, reports Forbes.

The analyst estimates that Apple will get between $6 and $8 per HTC smartphone based on Google Android operating system sold in royalty fees, which will generate an additional $180 million to $200 million annual revenue for Apple. It is interesting to note that HTC already pays $5 per Android smartphone to Microsoft Corp.

“For a lot of companies, $180-280 million in annual licensing revenue from one vendor is material but for AAPL it will likely be immaterial to its financials given its large revenue base of $193 billion and $48 billion in net income that the investment community is forecasting for FY 2013,” wrote Mr. Wu.

The analyst hopes that after Apple settled with HTC, other makers of Google Android-based smartphones, particularly Samsung, will also agree to pay for Apple patents allegedly infringed by their products.

“We view this as a positive and the big question is whether Samsung and Motorola will also reach settlement agreements,” noted Mr. Wu.