By Seth Fiegerman
Over the weekend, Apple and HTC announced a surprise settlement to their global patent battle, along with a 10-year licensing agreement that includes current and future patents held by both companies.
The terms of the settlement deal were not initially disclosed, but Sterne Agee analyst Shaw Wu reports hearing from multiple industry sources that HTC has agreed to pay Apple $6-$8 in licensing fees for each Android phone it sells. Wu estimates that could work out to be between $180-$280 million paid to Apple annually, given that HTC is expected to ship 30 million -35 million Android smartphones in 2013.
While this might sound like a lot, Wu points out in his research note that it is comparable to the $5 that HTC reportedly pays Microsoft per Android device as part of a separate patent settlement.
“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,” Wu wrote in the note.
Apple first sued HTC for infringing on patents related to the iPhone in 2010, as part of the so-called “thermonuclear war” against Google’s Android phones and its manufacturing partners declared by Apple’s former CEO and co-founder Steve Jobs’. Apple and HTC have since battled it out in court rooms around the world, with Apple winning multiple decisions.