HTC: We aren’t paying Apple $6-$8 per phone as part of licensing agreement


After coming to terms on a 10-year cross-licensing deal, speculation emerged that HTC could be paying Apple as much as $8 per smartphone shipped as part of the agreement’s terms. A little analyst math put a total payout at $280 million per year. The astonishing figure seemed a bit off, especially considering HTC’s recent financial woes. Is the company really desperate enough to make such a lopsided arrangement? Apparently not, according to CEO Peter Chou.

Chou, who HTC chairwoman Cher Wang says spearheaded talks with Apple, called such claims “outrageous” at a recent KDDI product launch in Tokyo. He said, “I think these estimates are very, very wrong…but I’m not going to comment anything on a specific number.” While the exact details of the deal are still a mystery, Chou noted that HTC considers this a “happy settlement and a good ending.”

We definitely wouldn’t consider $280 million per year a “good ending,” especially given HTC’s revenues have dropped by nearly half year-over-year. It’s not much of a surprise that Chou would deny earlier reports claiming as much. The higher brass at HTC obviously believe striking a deal afforded them the best opportunity to move on from the legal attacks of Apple. It’s also obvious they believe in keeping the particulars close to the vest for the time being.

[via TechCrunch]

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  1. he should have just said “happy ending”

    1. I know some people might find this racist. but you sir have won the “best comment” award on this site.

  2. I think Apple knows HTC isn’t their biggest competitor compared to Samsung, so it’s possible Apple gave a licensing agreement for a good price per phone, just to end it and focus on trying to find every way to fight Samsung in court. Good for HTC to come out with an agreement rather than throwing their already thinning money into court.

    1. I really think that’s what happened also. I think Apple just wanted less litigation.

      1. I… Um… is that a joke or are you being serious? I can’t tell. =.S

      2. Oh you mean they couldn’t keep fighting everyone everywhere all the time? Apple was stupid to pursue such a strategy in the first place. But then Steve Jobs did say he’d put the ruin of Android above the welfare of his company, and he kind of did that…

        But hey, it’s all good news to me. We could do with less petty litigation and more R&D and real innovation.

    2. Apple just needed someone to help fund their legal fees against Samsung. HTC was the perfect company to hand the bill off to.

  3. I think apple just wants to be able to lie in court and say look were always willing to make a reasonable deal

  4. If the estimates are very wrong, then why not come out and say how much it actually was? Or say that the estimates WERE wrong, not that you *thought* so..No, I have a feeling the $6-$8 per unit is closer to the truth than not, and chou is just doing damage control.

    1. If HTC discloses a lower value than $6 to $8 per phone, this would give Samsung a terrific argument. Because this would makes the amount of damages Apple claimed to Samsung looks totally exorbitant. What is strange is why HTC bothered to comment. Was there any need to hint that the estimated “$6 to $8 per phone” was very wrong?

      1. When a company is in financial troubles, any more news of loss has to be relegated. Once a company goes public, investors become the number one priority. This statement was purely to ease their concerns, despite it being true or not.

    2. Does it matter? It’s not like those dollars are coming out or going into your pockets. You’re still going to pay the price for the phone. Those specifics dont mean a damn thing to the consumers (except for Apple fans who seem to think that owning an Apple device is the same as being a stockholder).

      1. It’s the principle. And if I buy an HTC device, some of that money is absolutely coming out of my pocket and going to Apple. So yeah, to me, it does matter.

        1. Is it just because it’s Apple? Because that money that comes out of your pocket probably goes a dozen different directions, some probably to Apple before this even became an issue. Making an issue out of a “principle” like this is petty, pointless, and still DOESN’T MATTER! You know they’re paying Apple “something”; the amount doesn’t matter if you’re completely against Apple. Don’t by HTC if this principle is so important to you.

          1. Um, ok…didn’t mean to make you angry. So sorry, it was just, you know, my opinion.

            Bad day?

          2. Good day actually. I got a raise at work :D

      2. Those dollars aren’t coming out of my pockets because HTC’s ongoing failure to produce a device without glaring design flaws (battery, storage …) means I won’t be buying what they’re selling anyway.

        But if you do buy HTC in the future you’d better believe that not only are those dollars coming out of your pockets, but they’re coming out of your pockets after being marked up multiple times along the supply chain. You’ll end up paying at least 4X the apple tax.

      3. Yes, this money DOES come out of our pockets, if we buy HTC. This agreement means that I refuse to buy an HTC product — I’m not interested in supporting Apple.

        1. Well HTC and Motorola are already paying Microsoft for patent stuff in the settlements they made, so technically most of us are indirectly funding the leeches already. But if you don’t want even a penny to go to the Apple leech then I suppose you could boycott HTC.

      4. “Coming out of our pockets” is not outside the realm of possibility. If HTC has to pay a penalty per phone, that will cut into their already meager profit above margin.

        Since HTC will not likely see a reduction in their COGS, the ‘best’ and fastest place to recoup this penalty will be to raise the price per phone.

    3. I assume they are legally “gagged” from disclosing the amount – typical of these kind of delas.

      1. Yeah that’s what I figure.

    4. I’m sure the deal is sworn to confidentiality. Most backdoor deals like that are. After all Apple would prefer to not have Motorola, Samsung and others knowing just what HTC is paying so they can maybe get more out of them. I mean if everyone knows what HTC is paying, and it’s a very small sum, then the others would demand a similar low price as opposed to the $6-$8 per device Apple would love to be making off of Samsung and Motorola.

  5. We’re paying them $10 per phone! Nyuk nyuk nyuk!

    1. Haha! I certainly hope not! But it would be a semantic way of getting around the accusation!

  6. I think HTC could have more success if they released their best phones on VZW instead of mid-tier phones. Though, their production line in 2011 was pretty horrible quality, which hurt their rep.

  7. DAMN STRAIGHT. Apple wayy to much money in the bank.

  8. So Apple refuses to pay Motorola (Google) more than $1 per phone, but has no issues charging HTC $6-$8 per phone. Yeah, that makes perfect sense.

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