A report has come out that HTC may have to pay Apple $6-$8 for every single smartphone they sell, according to Shaw Wu, an analyst at Sterne Agee. Apple and HTC announced a licensing and settlement deal over the weekend, but no monetary terms were included in the release. According to Wu, “conversations with industry sources” led him to reach the dollar amounts he is estimating.
To put this into perspective, HTC sells approximately 30-35 million Android smartphones each year. If these number are true, that means Apple would make $180-$280 million per year from the sale of HTC smartphones. That’s an insane amount of money for a product that Apple does not have anything to do with. Of course, Apple generated $41 billion in net income during its last fiscal year, so it’s really just a drop in the bucket.
The most surprising part of this whole deal is that Apple actually backed down and agreed to a settlement. With the way Apple has gone after Samsung, it seems odd to see Apple stop going after HTC. Maybe they figured that in the long run, they stand to make more money with this licensing agreement than one large lump sum, like the $1 billion Apple is supposed to get from Samsung.
HTC also pays Microsoft $5 for every device it sells. So if the number from this report are to be believed, HTC will be paying between $11-$13 for each phone it sells for patent agreements. While this sounds fairly small, over the course of thousands of devices, that certainly is a large chunk of money that will not help HTC’s bottom line going forward. Still, these numbers are not official, so we will have to wait and see if this is actually Apple and HTC’s final agreement, or just a rumor.
[via Business Insider]