Apple makes nice with HTC to end patent disputes, still looking at $280 million Yearly

We have been reading up a little bit on the recent agreement between Apple and HTC. Over the weekend they apparently reached a 20-year licensing agreement that will end all current and potential future patent infringement litigation’s and suits. The details are still a bit sketchy, but new information is getting out there around the web about what just happened. Statements issued by both parties were fairly similar in that focus of this ‘Agreement’ is for “innovation instead of litigation.” It is a step in the right direction, but isn’t without its perks.

HTC has been having one heck of bad year with profits going down and legal fees going up. An agreement between these two guys is pretty huge for HTC. Hopefully it will help them start of 2013 with a bang instead of a missing fuse. The issues between the two company’s isn’t the only thing HTC needs to overcome to get back on track as a major industry player. With the recent signing of the deal, HTC’s stocks did see a boost.  They still have a long road ahead of them.

We all know Apple wouldn’t make this deal with anyone unless there was money to be had and benefits for long-term profits. Shaw Wu of Sterne Agee says that the deal will hand $6 to $8 per device over to Apple for every handset HTC ships. With projections of 35 million handsets to ship in 2013, that hands roughly $280 million over to Apple from HTC. Certainly there are various clauses in the agreement, after all, 10 years is a long time and at the rate of price increases that payout amount is sure to go up. Especially if HTC ships more devices then expected.

It is possible that Apple will look towards this agreement and attempt to offer similar arrangements with Motorola and Samsung as well. Which would put more money in Apple’s pockets, but help keep all parties focused on creating and using new technology together rather than focus on blocking and banning products that consumer want.

Personally I think it is a great deal. Sure Apple is still coming out on top, but the potential fees to be paid are drastically less than a loss in sales, settlement payouts and legal fees. Technology won’t stand a chance to innovate with battles constantly happening. While many of the actual details aren’t available, this move is not only a good start for HTC, but also for all others that Apple gets into litigation with. Lets hope for the best and hope that all these guys get back to creating truly unique and amazing experiences for the consumers.

Source: Reuters and Phandroid