After a lengthy legal battle with Qualcomm, the pair of companies reached a settlement earlier this week. And while both companies made their own announcements regarding the decision, neither went into great detail about the finer points of the matter.
For instance, we don’t know the final decisions that went into the settlement, nor just how much Apple and Qualcomm decided on when it comes to money. It’s not likely that either company will go out of their way to confirm these numbers, either, at least not soon. So analysts are weighing in on the matter, putting their best effort in trying to figure out the amount of money that was agreed upon.
According to an analyst from UBS, as was initially reported by CNBC, Apple may have paid between $5 billion and $6 billion to reach the settlement. In addition to that, Apple agreed to pay between $8 and $9 per iPhone in patently royalty fees. If that is indeed the case, Apple paid a high sum to bring an end to the ongoing litigation. It may have also worked out so that Apple can use Qualcomm’s 5G modems in 2020 iPhones as well.
“Apple probably paid Qualcomm between $5 billion and $6 billion to settle the litigation between the two companies, UBS analyst Timothy Arcuri estimated in a note distributed on Thursday.
Apple probably also agreed to pay between $8 and $9 in patent royalties per iPhone, estimated UBS, based on Qualcomm’s guidance that it expects earnings per share to increase by $2 as a result of the settlement.”
As far as patently royalty fees are concerned, up until this point Apple had been paying $7.50 per iPhone. If this increase is indeed real, that’s certainly a notable hike for Qualcomm and its regular profits from iPhones sold.
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Do you think the surprise settlement between the two companies was a good move?[via CNBC]