HTC and Apple Logo bearing a rip in the middle

HTC Will Pay $6-$8 To Apple For Every Smartphone Sold

November 12, 2012 - Written By Mike Stenger

In news that definitely caught some of us off guard, it appears that Apple and HTC have reached an agreement over licensing. Not just any agreement, but one that lasts ten years. While it sounds like it could be good news, the fact is that Apple is getting their way and HTC didn’t have much of a choice at this point.

Let’s face it: The company isn’t doing the greatest and after what happened to Samsung, they simply couldn’t afford a similar legal battle and succumbed to Apple’s demands. Either way, hopefully this eases the patent battles, but chances are it won’t.

According to Shaw Wu, an analyst at Sterne Agee, HTC will be paying Apple between $6 and $8 for every smartphone they sell. Shaw’s conversations with industry sources are said to have been what led him to the estimates.

HTC who’s already struggling against competitors like Samsung, will further have to step their game up to make up for the money that will instead be going to Apple. How much money are we talking? If we estimate that HTC sells between 30 and 35 million phones per year, that means Apple would receive between $180 and $280 million per year, solely off of licensing fees.

That’s quite a bit of money for patents that have been questioned time and time again. No matter where you stand on this whole battle, on the positive side, the long drawn out battle between the two has finally came to an end. As HTC’s CEO Peter Chou said, “HTC is pleased to have resolved its dispute with Apple, so HTC can focus on innovation instead of litigation.”

The company makes some great products. Yes, they’ll lose some money from this licensing deal. However, if they can realize that Samsung’s strategy of releasing major phones on all carriers is an incredibly successful one and pull themselves out of backwards thinking, it could be a very bright future.