It just keeps getting better for Apple Inc. (NASDAQ:AAPL). The company recently reached a settlement agreement with HTC Corp (TPE:2498) that could prove to be very lucrative for the Cupertino-based tech giant.
Both companies made a ten-year agreement that will enable Apple to earn $6.00 to $8.00 per HTC Corp (TPE:2498) phone sold, which could earn Apple Inc. (NASDAQ:AAPL) anywhere from $180 million to $280 million. It was reported that both companies made a joint agreement and both would end up putting some money toward it. It wasn’t noted whether the outcome was equal at net zero, or if one side got the better end of the deal. According to Stern Agee’s Shaw Wu, Apple got the better half.
Wu’s information comes from a Wall Street Journal source. The same source claimed that the executives for HTC Corp (TPE:2498) are rather relieved by this whole ordeal and that Apple Inc. (NASDAQ:AAPL) worked with them on this deal. It’s now speculated that Apple may use this latest deal as a blueprint for future agreements with other companies, most particularly Motorola and Samsung, although something tells me that Samsung Electronics Co., Ltd. (LON:BC94) might not be so fast to settle on an agreement with Apple
Wu stated, “We think it is fair that Apple will get some licensing revenue for the intellectual property it has developed (in particular multitouch gestures) in making the modern smart phone and tablet with touch screens. Prior to the iPhone and iPad, there were arguably no products that were close in functionality and appearance.”
It’s anticipated that Apple and HTC won’t have anymore courtroom litigations for awhile. While it’s evident that this is a huge win for Apple Inc. (NASDAQ:AAPL), there is really no telling what could happen to HTC Corp (TPE:2498). These licensing fees could hurt HTC in the long run, especially if consumers lose interest in their products. Hopefully, this move will prove beneficial to both companies in the long run.