With Apple and HTC’s settlement weekend announcement, speculation now turns to the 10 year cross-licensing deal and its value to both companies. The terms of the settlement are confidential, but at least one analyst is working to put a number on the deal. Shaw Wu, an analyst at Sterne Agee says that “conversations with industry sources” are helping him nail down a pretty accurate look at how Apple and HTC are making out monetarily with this deal.
Agee says that with HTC selling between 30-35 million Android smartphones annually, it will likely generate between $180-$280 million in annual revenue for Apple. The number is speculative of course, but is is being based on a similar deal HTC already has with Microsoft which has HTC sending a $5 per-device royalty to Microsoft for each Android device sold.
All totaled over 10 years, Apple could make somewhere in the $2.8 billion dollar range in pure profit revenue from HTC since there is no cost associated to Apple with this deal. Over the span of 10 years, the deal likely looks a lot better than having to risk a similar $1 billion one-time payout ala Samsung.
Given those terms, it’s no wonder Apple may have given up the fight and recognized that they stood to make more money from HTC over the 10-year period than they did from a one-time payout.