Can Apple’s Patent Brainwave Fix Everything?

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Apple (NASDAQ:AAPL) will receive between $6 and $8 for every phone that HTC sells as part of the patent settlement and licensing deal the two companies reached over the weekend, Sterne Agee analyst Shaw Wu has said. The agreement entails a dismissal of all ongoing court litigation between the two companies and the start of a ten-year license agreement covering patents held by either company. Wu wrote in a research note to clients on Monday that his figure was based on “conversations with industry sources.”

Extrapolating the estimate, with HTC selling between 30 million and 35 million Google (NASDAQ:GOOG) Android smartphones every year, the deal will generate between $180 million and $280 million in annual revenue for Apple.

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Wu added that Apple may use this deal as the “blueprint” to offer companies like Samsung and Motorola similar agreements. “We think it is fair that Apple will get some licensing revenue for the intellectual property it has developed (in particular multi-touch gestures) in making the modern smartphone and tablet with touchscreens,” the analyst wrote. “Prior to the iPhone and iPad, there were arguably no products that were close in functionality and appearance.”

However, RBS analyst Wanli Wang was of the belief that Apple may not go as easy on Samsung, which it considers a much more potent competitor than HTC. “I don’t think the pact with HTC implies Apple is going to do a similar settlement with Samsung,” Wang told The Wall Street Journal. Apple “no longer considers HTC a threat, but Samsung is a big and major competitor, so I don’t think Apple will go easy on it,” the analyst added.

HTC also pays Microsoft (NASDAQ:MSFT) $5 per smartphone sold for using its patents, Wu said.

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