A report has come out that HTC have to pay Apple $6-$8 for every single smartphone they will sell. Apple and HTC announced a settlement deal over the weekend along with a 10-year licensing agreement that includes current and future patents held by both companies.
“We think $6-$8 seems reasonable if not a relatively small price for HTC and others to pay to be able to sell a modern smart phone with touchscreen,” Shaw Wu, a Sterne Agee analyst, wrote in a statement. “This is apparently lower than the range that [Apple] initially proposed,” he wrote in a Monday note to analysts. “But to put this in context, this compares to press reports indicating HTC pays [Microsoft] $5 per phone running Android.”
“With both Samsung and Motorola (which is owned by [Google]), still under litigation with Apple, the big question is whether they are closer to a settlement?” Wu continued. “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 smartphone and tablet with touch screens. Prior to the iPhone and iPad, there were arguably no products that were close in functionality and appearance.”
On an annual basis and assuming that HTC sells around 30 to 35 million Android devices every year, Wu estimates that HTC could pay around $180-$280 million annually to Apple. Wu’s estimate is reportedly based on his conversations with some sources in the mobile industry.
Do you think is right for HTC to pay Apple this amount of money? Let us know in the comments.