Apple Agrees to Pay Ericsson a Portion of its iPhone Revenue in Patent Deal

Apple and the mobile telecom giant Ericsson have finally come to an agreement upon a patent license deal. With this formal agreement in place, the world’s largest company Apple will now be paying out a small portion of its iPhone revenue to the Swedish company.

Apple Vs Ericsson

Apple Vs Ericsson

Although Ericsson did not officially make revelations as to how much it could possibly make from the seven-year deal, an estimate released by investment bank ABG Sundal Collier brought to limelight by Reuters has Apple had suggested that Apple would now be paying out 0.5 percent of its iPad and iPhone revenue.

The patent dispute between Apple and Ericsson has been waging since 2012. Ericsson is in firm ownership of its patents that are very fundamental to LTE technology, including older standards like GSM and UMTS. Samsung resolved to make payments Ericsson as to ongoing fees for those same patents which was included as a package of a deal between the two companies back in 2014.

Apple dragged Ericsson to court back in January, with the strong assertions that Ericsson’s patent fees were excessive. Ericsson countersued a day later, following it up by attempting to get the United States International Trade Commission to grind iPhone sales in the US to a loud halt.

Now the legal crisis is over, and the two companies have come to reason, agreeing to work together on “development of the next generation 5G cellular standards,” according to Ericsson. It is fair to commend this move as a smart one for Apple, it may be probably not if Apple wants to continue paying out patent fees to Ericsson for the rest of time.

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