HTC CEO: No Way Are We Paying Apple $8 a Phone: Report
HTC and Apple have reached an agreement over patents, but no way does it consist of the Taiwanese phone maker paying Apple $8 for each smartphone it ships, said HTC CEO Peter Chou.
Chou told the press at a Tokyo event that such reports were "outrageous," Reuters reported Nov. 20.
"I think that these estimates are baseless and very, very wrong. It is an outrageous number, but I'm not going to comment anything on a specific number. I believe we have a very, very happy settlement and a good ending," Chou said, according to the report.
Apple and HTC ended their years-long patent battle this month, announcing Nov. 10 that they'd dismissed all lawsuits and reached a 10-year licensing agreement that extends to current and future patents held by both parties.
"HTC is pleased to have resolved its dispute with Apple, so HTC can focus on innovation instead of litigation," Chou said in a statement when the agreement was announced, noting that the terms of the settlement are confidential.
Sterne Agee analyst Shaw Wu, after digging for the secret facts among industry sources, told investors in a Nov. 19 research note that he believed HTC could be paying Apple between $6 and $8 per smartphone it shipped, which could net Apple revenue of between $180 million and $280 million in 2013, given the 30 million to 35 million smartphones HTC is expected to ship.
"This is apparently lower than the range Apple initially proposed," Wu wrote, according to Apple Insider. "But to put this in context, this compares to press reports [that] indicated HTC pays [Microsoft] $5 per phone running Android."
Apple's initial 2010 lawsuit against HTC kicked off industry-wide patent disputes. Wu added that he believes the HTC settlement will inform Apple's ongoing suits with Samsung and Motorola.
"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 touch-screens," Wu said, according to the report.
HTC's smartphone sales have suffered with the rise of Samsung's successful Galaxy lineup of devices. During the third quarter, HTC fell to 10th place in the global phone rankings, selling 8.4 million phones for a 2 percent share of the market, according to Gartner.
Looking to reboot its brand, HTC and Verizon Wireless executives introduced the Droid DNA by HTC at a New York City event Nov. 13, with HTC President Jason Mackenzie calling the smartphone "Droid like only HTC can do."
The thin-and-light smartphone features a 5-inch display that's the first in the industry with a 1080p high-definition super LCD 3. It's also the first Android smartphone in the U.S. with wireless charging and the first to pair Verizon's Long Term Evolution (LTE) network with Qualcomm's newest quad-core Snapdragon S4 Pro processor.
The head of HTC's design team called the DNA a "true performance beast," and Mackenzie, underscoring yet again HTC's goal for the phone, insisted: "It's not only the sleekest Droid ever, it's the most advanced phone on the market."
Whatever the details of Apple's agreement with HTC, the DNA should put a few more dollars into Apple's coffers.