Financial terms were not disclosed. However, analysts are offering estimates on royalty rates. For example, Shaw Wu, an analyst at Sterne Agee, estimates that Apple will get $6-$8 per Android phone from HTC, roughly comparable to the $5 per Android phone that HTC is paying Microsoft.
HTC has little use for Apple patents. Both HTC One X and Droid DNA are excellent phones which compare favourably with Samsung’s Galaxy III and iPhone 5. For HTC, the main benefit of this deal is that it allows HTC and its carrier partners to market and sell Android phones without the uncertainty of junk patent lawsuits from Apple, since carriers are loath to put their resources on phones which may be banned.
The $180 million to $280 million per year that Apple will get is insignificant relative to Apple’s annual revenue. However, the settlement could be a model for Apple to offer similar deals to other Android OEMs. This will allow Apple to focus on its legal battles with Samsung and Motorola Mobility/Google, who are formidable opponents and who have already won (and lost) against Apple in other jurisdictions around the world.
Tim Cook is not as emotionally opposed to Android as Steve Jobs was, who vowed to wage “thermonuclear war” to destroy Android. Apple also recognizes that it may not be able to invalidate or exclude LTE patent issues with HTC in another lawsuit that could ban iPhones.
A small victory for common sense. Let the best phone(s) win in the marketplace.
Image source Technobuffalo