For the next seven years, Apple will pay a fraction of its iPhone and iPad profit to Ericsson in royalties.
Ericsson has hit the jackpot. They have signed into an agreement with Apple that will see them getting a paycheck every time a iPhone or iPad get sold. Apple decided instead of fighting it out with Ericsson they would pay them. This all started back in February when Ericsson filed suits in many different jurisdictions for patent infringement. According to Ericsson, Apple has been violating 41 patents over the past few years with its iPhone and iPad. The main infringement was on patents related to GSM, UMTS and LTE technologies. Apple’s only defence was that Ericsson royalty fees were too high. Ericsson has dropped all its lawsuits against Apple. For 2015, Apple will be making Ericsson a lump-sum payment.
Of course no one is talking about the exact amount that Apple is set to pay Ericsson this year and on every unit of the iPhone and iPad it sells for the next seven years. Apple dominates the smartphone market for now and for the foreseeable future. Apple sells millions of iDevices per quarter so even a small amount will a nice chunk of money. As a part of the agreement, Apple and Ericsson will work closely on the 5G network technology and network optimisation. One thing is for sure. Ericsson had licensing revenue of about $1.6 billion in 2015 but it is sure to top that in 2016.
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