Apple (AAPL) HTC Settlement Sooner Than Expected; Samsung and Motorola to Follow - Sterne Agee
Tweet
Share
E-mailGet Alerts AAPL Hot Sheet
Price: $305.93 +0.22%
Rating Summary:
44 Buy, 29 Hold, 9 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
44 Buy, 29 Hold, 9 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Join SI Premium – FREE
Sterne Agee's Shaw Wu commented on Apple (NASDAQ: AAPL) after the company and HTC announced over they weekend that they settled their litigation and will engage in a 10-year cross licensing arrangement.
While financial terms were not disclosed Wu believes AAPL is likely getting a net licensing fee due to its much stronger patent portfolio and believe position as the undisputed inventor of the modern smart phone with touchscreen. From conversations with industry sources, we estimate the net licensing fee to AAPL to be in the $6-$8 per phone range which means about $180-280 million in annual revenue given the 30-35 million Android smart phones HTC will likely ship in 2013.
"We view this as a positive and the big question is whether Samsung and Motorola will
also reach settlement agreements?," Wu asks. "We think the answer is yes and the terms set with HTC could at least provide a blueprint. We think it is fair that AAPL will get some licensing revenue for the intellectual property it has developed (in particular multi-touch gestures) in making the modern smart phone and tablet with touchscreens. Prior to the iPhone and iPad, there were arguably no products that were close in functionality and appearance."
The firm reiterated their Buy rating and price target of $840.00
For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.
Shares of Apple closed at $547.06 yesterday.
While financial terms were not disclosed Wu believes AAPL is likely getting a net licensing fee due to its much stronger patent portfolio and believe position as the undisputed inventor of the modern smart phone with touchscreen. From conversations with industry sources, we estimate the net licensing fee to AAPL to be in the $6-$8 per phone range which means about $180-280 million in annual revenue given the 30-35 million Android smart phones HTC will likely ship in 2013.
"We view this as a positive and the big question is whether Samsung and Motorola will
also reach settlement agreements?," Wu asks. "We think the answer is yes and the terms set with HTC could at least provide a blueprint. We think it is fair that AAPL will get some licensing revenue for the intellectual property it has developed (in particular multi-touch gestures) in making the modern smart phone and tablet with touchscreens. Prior to the iPhone and iPad, there were arguably no products that were close in functionality and appearance."
The firm reiterated their Buy rating and price target of $840.00
For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.
Shares of Apple closed at $547.06 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- KeyBanc Reiterates Underweight Rating on Apple (AAPL)
- Apple opens Advanced Manufacturing Center in Houston for SMBs
- Freedom Broker Upgrades Serve Robotics (SERV) to Buy
Create E-mail Alert Related Categories
Analyst CommentsRelated Entities
Sterne AgeeSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
