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Can Apple Earn $10 From Every Android Device Sold?

Earlier, it was widely reported that Microsoft gets about $5 from sales of HTC Android phones. This sort of unexpected revenue stems from licensing deals that were offered to HTC from Microsoft’s IP protection departments. HTC wasn’t commenting much on this deal back in the day, but the deal is here.

The alternative approach to it, you guessed it right: no licensing deals and a continuing patent war. As Appleinsider points out,  Steve Jobs indicated before he died to biographer Walter Isaacson that he had no interest in licensing Apple’s patented technology to Android manufacturers. Jobs said he believed Android was a “stolen product,” and indicated he was “willing to go thermonuclear war” to stop it. Well, it remains to be seen how much “thermonuclear” this war has seen so far. But it’s global and it’s very expensive, that’s for sure.

Kevin Rivette, managing partner at intellectual property firm 3LP Advisors LLC, believes this all-out war approach could be detrimental to Apple shareholders, because it is prompting device makers to modify their infringing products and work around Apple’s intellectual property. Examples of such strategies deployed multiply recently: earlier this month, the U.S. International Trade Commission found that HTC was in violation of an Apple patent related to so called “Data Detectors”, but only a day later HTC said it was testing new devices that work around the Apple’s patent in question. As a result, the ITC’s ruling is not expected to have an immediate impact on either HTC or Apple. Problem could be solved, even if for the moment, or for just this particular case. Now, Samsung released a revised Galaxy Tab 10.1N that the German court recognized as significantly different than the original, but hotly disputed by Apple’s patent warriors.

Then, with this patent war being global, it means there are many different battlefield decisions which are not so clear-cut as Apple would like them to see. Think of Germany, Australia recently. Rivette thinks Apple should reach settlements in cases where it can’t win import restrictions against competing devices.

Today’s estimate of what Apple can gain from such settlement deals is about $10 of royalties per Android device. What will happen with this revenue tomorrow, when manufacturers will be actively cleaning their devices from last signs of disputed technologies is anybody’s guess.

On the other hand, Microsoft in its wars with Android is showing a more “balanced” approach:  it has agreements in place with Samsung, HTC, Acer and Viewsonic, while lawsuits against Motorola Mobility, Barnes & Noble and others continue. Should Apple take the Microsoft Way?

About Alexander Udalov

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