HTC and Apple, upon having recently made peace with each other, have dropped all litigation against each other over issues regarding infringement of patents. Both the companies have amicably entered into a licensing agreement deal, with HTC supposedly shelling out $6 to $8 per smartphone as a part of the deal. However, Peter Chou, founder of HTC, dismissed these estimates as being entirely baseless and wrong.
HTC and Apple had earlier failed to specify the terms of the settlement. Analysts had predicted the aforementioned estimates. According to these estimates, HTC could end up paying $180-250 million of their yearly revenue to Apple in licensing fees, going by the company’s sales figures from the past. As mentioned by Reuters, Peter Chou has not confirmed the exact details of the amount Apple and HTC have settled for, stating that both the companies are satisfied with the existing agreement. As for the deal between HTC and Microsoft, the former is said to be paying the latter anything between $10 to $5 for every Android device sold, though the terms of the deal have been kept confidential. With both these licensing agreements, HTC’s bottom line is bound to be affected if it pays anywhere between $15-20 per device to other manufacturers. HTC has stated that its revenue and profit forecast for the 4th quarter is not affected by the deal in any way.
The settlement between Apple and HTC is first of its kind, among several other ongoing legal battles between Apple and manufacturing companies utilizing Android. The settlement will clearly work well for HTC which is perceived to be a vulnerable opponent due to its failure to back itself with a range of potentially important patents that could be used against Apple. Meanwhile, unlike HTC, companies like Motorola and Samsung are equipped with patents that they can effectively use in a cross-licensing deal with Apple.
Differing in opinion with the late Steve Jobs (who vowed to go to ‘war’ with Android), Tim Cook, Apple’s current CEO, is very clear about his aversion to litigation. Though this does not indicate that Apple will avoid legal resource over intellectual property rights in the future, Cook most certainly is open to the idea of settlements.
