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Apple Could Generate $280 Million a Year from HTC Deal

By - Source: CNET | B 21 comments

Patent settlement deal spans for a decade.

Following the global patent settlement between Apple and HTC, the former is said to be set to pocket over quarter of a billion dollars from the deal.

Sterne Agee analyst Shaw Wu said he has spoken with industry sources who told him that Apple will generate around $6 to $8 in licensing fees for each smartphone HTC ships next year.

When factoring in his estimate of 30 million to 35 million shipments, Wu believes Apple will generate between $180 million to $280 million in licensing fees alone.

To add credence to Wu's report, a Wall Street Journal source has backed up the analyst's claim by stating they have knowledge of the deal. That said, the source didn't know any details pertaining to how much Apple will receive in the deal.

The unnamed source did, however, tell WSJ that HTC's executives are relieved that its two year battle with Apple is over. The settlement itself covers all current and future patents for a duration of a decade.

 

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Top Comments
  • 17 Hide
    bllue , November 16, 2012 3:16 PM
    So 3-4+ billion dollars in licensing over 10 years. F that. Apple are the definition of patent trolls
  • 17 Hide
    DRosencraft , November 16, 2012 3:08 PM
    This is why Samsung said they would keep fighting. It may be costly to fight these legal battles, but it probably isn't costing over a quarter BILLION dollars a year! That is a fairly big sum of money to be looking to make up in your revenue numbers ($70 million a quarter). Let's hope f or HTC's sake that this isn't quite accurate.
  • 14 Hide
    wildkitten , November 16, 2012 3:53 PM
    ta152hApple is raping and pillaging competing companies, much like Microsoft did until they monopolized every market they could, and got slapped down with legal problems.So, we have Apple wanted to be what Microsoft was, Microsoft wanting to be what Apple is, and Google wanted to be everything Microsoft was, is, and ever will be, with a touch of Apple thrown in. I always thought I would love to see Microsoft brought to their knees, and while they are a failing company, it's not nearly as pleasing as I thought. There's always another company doing the same nonsense and trying to gain the same control. The only difference is Apple and Google make products people want (not always sure why ...), whereas Microsoft makes stuff people need, but don't really want, and now they're even trying to make us like it (like that rubbish called Windows 8). At least Intel makes spectacular products. The rest, not so much.

    Microsoft a failing company? A business that has never had a penny of debt liability is failing and still sells hundreds of millions of copies of it's product? I would hate to see what a company needs to do to be considered successful.

    Why is it so many of Tom's commenters so full of hyperbole these past few months?
Other Comments
    Display all 21 comments.
  • 17 Hide
    DRosencraft , November 16, 2012 3:08 PM
    This is why Samsung said they would keep fighting. It may be costly to fight these legal battles, but it probably isn't costing over a quarter BILLION dollars a year! That is a fairly big sum of money to be looking to make up in your revenue numbers ($70 million a quarter). Let's hope f or HTC's sake that this isn't quite accurate.
  • -3 Hide
    lengcaifai , November 16, 2012 3:14 PM
    iOS and Android keep fighting over = windows phone 8 wins
  • 17 Hide
    bllue , November 16, 2012 3:16 PM
    So 3-4+ billion dollars in licensing over 10 years. F that. Apple are the definition of patent trolls
  • -4 Hide
    ta152h , November 16, 2012 3:42 PM
    Apple is raping and pillaging competing companies, much like Microsoft did until they monopolized every market they could, and got slapped down with legal problems.

    So, we have Apple wanted to be what Microsoft was, Microsoft wanting to be what Apple is, and Google wanted to be everything Microsoft was, is, and ever will be, with a touch of Apple thrown in.

    I always thought I would love to see Microsoft brought to their knees, and while they are a failing company, it's not nearly as pleasing as I thought. There's always another company doing the same nonsense and trying to gain the same control. The only difference is Apple and Google make products people want (not always sure why ...), whereas Microsoft makes stuff people need, but don't really want, and now they're even trying to make us like it (like that rubbish called Windows 8).

    At least Intel makes spectacular products. The rest, not so much.
  • 14 Hide
    wildkitten , November 16, 2012 3:53 PM
    ta152hApple is raping and pillaging competing companies, much like Microsoft did until they monopolized every market they could, and got slapped down with legal problems.So, we have Apple wanted to be what Microsoft was, Microsoft wanting to be what Apple is, and Google wanted to be everything Microsoft was, is, and ever will be, with a touch of Apple thrown in. I always thought I would love to see Microsoft brought to their knees, and while they are a failing company, it's not nearly as pleasing as I thought. There's always another company doing the same nonsense and trying to gain the same control. The only difference is Apple and Google make products people want (not always sure why ...), whereas Microsoft makes stuff people need, but don't really want, and now they're even trying to make us like it (like that rubbish called Windows 8). At least Intel makes spectacular products. The rest, not so much.

    Microsoft a failing company? A business that has never had a penny of debt liability is failing and still sells hundreds of millions of copies of it's product? I would hate to see what a company needs to do to be considered successful.

    Why is it so many of Tom's commenters so full of hyperbole these past few months?
  • 7 Hide
    jazz84 , November 16, 2012 4:02 PM
    wildkittenWhy is it so many of Tom's commenters so full of hyperbole these past few months?


    Well, we just finished a big election year in the US, so everyone here has spent the last WAY TOO LONG being whipped into a rhetorical fervor and led to believe that a politics-driven apocalypse is right around the corner. Wouldn't surprise me if that's what's got everyone in an uproar over just about everything now...
  • -6 Hide
    ericburnby , November 16, 2012 4:39 PM
    bllueSo 3-4+ billion dollars in licensing over 10 years. F that. Apple are the definition of patent trolls


    Another stupid comment of the day.

    Motorola is asking Microsoft for around $4 billion PER YEAR for less than 50 patents which are part of a standard (the least costly of all patents to license). And you think Apple asking for $1/4 billion per year for a whole pool of patents including non-standard patents (the most expensive type of patent to license) is outrageous?

    HTC was sabre-rattling all year long (just like Samsung with their "we'll never settle" rhetoric) talking about how they'll keep on fighting. In the end they licensed. And all the Android companies bashing Microsoft ended up signing license agreements too. I bet Samsung will also license.
  • 3 Hide
    Anonymous , November 16, 2012 4:45 PM
    I wont buy HTC to support apple. NO.
  • -4 Hide
    TeraMedia , November 16, 2012 5:33 PM
    I would love to see an opinion piece by Zak to see where he stands on all of this Apple vs. X stuff.
  • 7 Hide
    wemakeourfuture , November 16, 2012 5:39 PM
    TeraMediaI would love to see an opinion piece by Zak to see where he stands on all of this Apple vs. X stuff.


    Unless he can copy and paste it from another source I don't think we will :p 
  • 6 Hide
    Kami3k , November 16, 2012 5:41 PM
    ta152hApple is raping and pillaging competing companies, much like Microsoft did until they monopolized every market they could, and got slapped down with legal problems.So, we have Apple wanted to be what Microsoft was, Microsoft wanting to be what Apple is, and Google wanted to be everything Microsoft was, is, and ever will be, with a touch of Apple thrown in. I always thought I would love to see Microsoft brought to their knees, and while they are a failing company, it's not nearly as pleasing as I thought. There's always another company doing the same nonsense and trying to gain the same control. The only difference is Apple and Google make products people want (not always sure why ...), whereas Microsoft makes stuff people need, but don't really want, and now they're even trying to make us like it (like that rubbish called Windows 8). At least Intel makes spectacular products. The rest, not so much.


    So much wrong with this post that all I'm going to do is quote this.
  • 3 Hide
    ikyung , November 16, 2012 6:32 PM
    Apple : HTC go work that corner street.
    HTC : Will do pimp.
    Apple : Samsung you work the other side.
    Samsung : Dafuq? You don't want to mess with me Apple. Going to raise the prices on your chips by 20%
    Apple : Sorry pimp.

    Basically what's going on right?
  • 3 Hide
    Anonymous , November 16, 2012 10:22 PM
    [Whenever anyone buys an Android device Microsoft gets a paycheck. So Samsung would rather pay a billion at a time when they lose lawsuits instead of going into a licensing agreement?..lol Yeah that's sound business sense. I have no sympathy for Samsung. If they had done their homework in the first place they wouldn't be in this mess to begin with.]

    Another typical Apple fanboy troll. What homework? Apple is sueing everyone using ridiculous claims and appeal to general public misplaced sense of patriotism. As always, part of the business strategy of Apple is lawsuit. Don't forget Apple only has a landslide win in California while all over the world the lawsuit has failed. And the Asian suppliers see through that pretty well. Why do you think other manufacturers do not consider building new plant just for Apple is not a good option? Because Apple will switch suppliers at a drop of a hat historically. There is no true partnership with Apple because Apple does not value anyone else. This is not a company other companies want to put their faith in with it comes to long term business relationship.
  • 0 Hide
    ericburnby , November 16, 2012 10:27 PM
    JacekRingApples got them to agree to $6 to $8 (supposedly) per smartphone. But when they were sued they only wanted to pay $0.01 per smartphone for licensing. WOW.


    Another stupid comment. FRAND patents go for much less than non-FRAND patents. And if it was a single patent then $0.01 would be fair. Multiply that by a billion devices per year and suddenly that "penny" patent is worth $10 million per year. If you've got a bunch of these FRAND patents at $0.01 then you're making lots of money.

    That's how FRAND (or standard essential patents) work. You get pennies per patent but you collect on every single device ever sold anywhere in the world. Could you imagine having a patent on USB? Every single computer, cell phone, mouse, keyboard, digital camera, thumb drive or similar gets you a royalty. Even at a penny per unit you're making a fortune.
  • 0 Hide
    nieur , November 16, 2012 10:45 PM
    if the deal is for entire pool of licences now HTC can make iPhone clone
  • 0 Hide
    epdm2be , November 16, 2012 11:58 PM
    lengcaifaiiOS and Android keep fighting over = windows phone 8 wins

    They only win because MSFT killed Nokia's Symbian & Meego first from the inside out, which were the real threat.
    All that's left now is a bunch of greedy companies who use false advertising to sell their mediocre products. For all I care they can ALL go!
  • -3 Hide
    epdm2be , November 17, 2012 12:06 AM
    I''ll correct that for you:

    "Apple is raping and pillaging competing companies, much like Microsoft STILL do..."

    But it seems some of us have short memories. Just read for example the URL below to jog your memory.

    http://www.tomsguide.com/us/Google-android-OS-Mobile-Patent,news-6622.html

    I remmeber commenting back then that Android was a pitfall and that companies like e.g. Nokia and RIM should stay as far away from it as possible! Again the proof that Android is a financial black hole used by the American industry to suck dry all non-US innovation.

    It seems that American companies these days use everything BUT innovation to fill their CEO's greedy pockets.
  • 0 Hide
    wildkitten , November 17, 2012 12:50 AM
    TeramediaI would love to see an opinion piece by Zak to see where he stands on all of this Apple vs. X stuff.

    That would depend on what he is, an editorialist or a journalist. Considering all he does is write up the facts and leave it to people to make up their own minds, I would say journalist. People bash him all the time when he writes articles about something positive with Apple, but completely ignore him as author for the articles where Apple look bad, so he has gotten, undeservedly, a reputation of being pro-Apple. I think the most anyone can say about Zak Islam is that he is the Apple beat writer and it's his job to write up articles about them whether they show Apple in a positive or negative light.

    As for him copying and pasting, this is no different than most other news articles on Tom's. They don't really go out and do breaking news, they do a lot of testing and reviews and summarize news articles from other sites. If you look, most every news article on Tom's is cited from another source. So he can hardly be singled out for doing that.
  • 0 Hide
    ta152h , November 17, 2012 8:56 PM
    wildkittenMicrosoft a failing company? A business that has never had a penny of debt liability is failing and still sells hundreds of millions of copies of it's product? I would hate to see what a company needs to do to be considered successful.Why is it so many of Tom's commenters so full of hyperbole these past few months?


    That's a legitimate question, and maybe you'll learn something new.

    Who does Microsoft work for? It's stock holders. Simple, right?

    Who has Microsoft failed? It's stock holders. Simple, right?

    So their main reason for generating money, they've failed at. Yet, it's hard to understand?

    Let's put it another way, if you bought Microsoft stock 10 years ago, you'd be able to sell your stock for 10% less. That's good? Let's figure in inflation, and you've basically lost your shirt with this failing, yes failing, company.

    Let's look at some other tech stocks, that are really big. Apple? Well, they went up 60x in that time period. Another software giant, which is probably more comparable would be Oracle. They went up 2.5x in that time period. IBM sells a lot of software too, they doubled in that time period.

    Google is basically a software company too, and Microsoft competes with them quite a bit. Guess what? They went up 5.5x in less than eight years.

    Anyway you look at it, a stock that goes down 10% over ten years is a failure. There are definitely worse failures, but that doesn't change that Microsoft's situation. It wouldn't change the fact you've suffered badly as a stock holder, and wouldn't make it less painful. And, at the end of the day, Microsoft's primary responsibility is to work for their stockholders. And they've failed.
  • 0 Hide
    blazorthon , November 19, 2012 2:30 PM
    ta152hThat's a legitimate question, and maybe you'll learn something new.Who does Microsoft work for? It's stock holders. Simple, right? Who has Microsoft failed? It's stock holders. Simple, right? So their main reason for generating money, they've failed at. Yet, it's hard to understand? Let's put it another way, if you bought Microsoft stock 10 years ago, you'd be able to sell your stock for 10% less. That's good? Let's figure in inflation, and you've basically lost your shirt with this failing, yes failing, company.Let's look at some other tech stocks, that are really big. Apple? Well, they went up 60x in that time period. Another software giant, which is probably more comparable would be Oracle. They went up 2.5x in that time period. IBM sells a lot of software too, they doubled in that time period. Google is basically a software company too, and Microsoft competes with them quite a bit. Guess what? They went up 5.5x in less than eight years. Anyway you look at it, a stock that goes down 10% over ten years is a failure. There are definitely worse failures, but that doesn't change that Microsoft's situation. It wouldn't change the fact you've suffered badly as a stock holder, and wouldn't make it less painful. And, at the end of the day, Microsoft's primary responsibility is to work for their stockholders. And they've failed.


    MS's stock is one of the best investments possible. Do you not understand the concept of a split? MS does them often to keep their stock price low enough for the average investor while still giving a lot of payback in investments. Since the mid or late 90s, the value of a buying a single MS stock back then has gone up something like 30,000 percent thanks to the many splits that MS has done.Thirty THOUSAND percent!

    Compared to Apple's ridiculously volatile stock pricing (went down like $200 in less than a week recently), MS's decently paced and steady improvement in value thanks to splits is a god-send for a smart investor. You buy a stock and a couple to a few years later, it may be the same price, but you splits mean that you can now have several of that stock and at the same price, that's a up to a several hundred percent improvement in value!
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