Apple could earn hefty yearly sum thanks to HTC deal
12th Nov 2012 | 19:36
Talk about a golden handshake...
Apple will pocket hundreds of millions each year as a result its newly-minted licensing agreement with rival firm HTC, according to one analyst.
Over the weekend, the warring duo called a halt to all global legal hostilities by announcing a new 10-year licensing accord.
The terms were undisclosed, but analyst Shaw Wu of the Sterne Agee group has been told by insiders that HTC will be forking over up to $8 (UK£5.03, AUD$7.67) to Apple for every device it sells.
With HTC projected to ship 30-35 million phones around the world in 2013, Apple could earn anything from $180 million (UK£113, AUD$176) up to $280 million (UK£176, AUD$268) from the peace agreement, Wu estimated.
Lower than proposed
"This is apparently lower than the range AAPL initially proposed," Wu told investors. "But to put this in context, this compares to press reports indicated HTC pays (Microsoft) $5 per phone running Android." (UK£3.14, AUD$4.75)
An HTC representative had, over the weekend, stated that the licensing agreement would do little to negatively affect the company's bottom line, but $280 million a year is notable chunk of anyone's money.
Wu also believes that the 10-year agreement could be a "blueprint" and result in a similar fate for the likes of Motorola and Samsung, who're also embroiled in bitter disputes with Apple over alleged patent infringement.
He wrote: "We think it is fair that Apple will get some licensing revenue for the intellectual property it has developed (in particular multitouch gestures) in making the modern smart phone and tablet with touch screens.
"Prior to the iPhone and iPad, there were arguably no products that were close in functionality and appearance."