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HTC, Apple (AAPL) Reach 10-Year Licence Deal; Settle Patent Lawsuits

 November 12, 2012 11:45 AM

(By Balaseshan) HTC and Apple Inc. (NASDAQ: AAPL) have reached a global settlement that includes the dismissal of all current lawsuits and a ten-year license agreement.

"We are glad to have reached a settlement with HTC. We will continue to stay laser focused on product innovation," said Tim Cook, CEO of Apple.

The license extends to current and future patents held by both parties. The terms of the settlement are confidential.

Apple will get $6-$8 for every Android-based HTC phone sold, Sterne Agee analyst Shaw Wu told the Bloomberg. HTC sells 30-35 million Android smartphones annually, so it will generate $180-$280 million in annual revenue for Apple.

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An Apple suit to the U.S International Trade Commission in Washington sought to block imports of HTC smartphones as the devices allegedly copied the iPhone's pinch-to-zoom feature, according to the Bloomberg. HTC fought back, alleging infringement of patents it bought last year for ways to reliably transmit a larger amount of data.

The settlement with HTC, the first company Apple sued for violating iPhone patents, suggests Cook will take a softer line than Steve Jobs, who vowed before his death last year to wage all-out war against smartphones powered by Google Inc.'s (NASDAQ: GOOG) Android, according to the Bloomberg.

The agreement may also serve as a blueprint for Apple to negotiate patent accords with Samsung Electronics Co. and Google's Motorola Mobility business, Shaw Wu told the Bloomberg.

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Analysts told the Wall Street Journal that the HTC settlement reflected a "philosophical shift" at Apple under Chief Executive Tim Cook.

"Apple's late founder, Steve Jobs, had felt strongly about destroying his copycats, but Tim Cook's thinking is slightly different. He appears to be less interested in spending so many resources on lawsuits," Nomura analyst Aaron Jeng told the WSJ.

AAPL is trading down 0.58% at $543.87 on Monday. The stock has been trading between $363.32 and $705.07 for the past 52 weeks.



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