Apple has signed a deal agreeing to pay Ericsson about 0.5% of its revenue on iPhones and iPads sold, reports Reuters.
Ericsson's technology that helps smartphones and tablets connect to mobile networks was previously licensed for use by Apple; however, the license expired two years ago and negotiations failed to bring about a new deal. Ericsson filed a lawsuit against Apple in January.
The two companies have now reached a deal.
Ericsson on Monday estimated overall revenue from intellectual property rights in 2015 would hit 13 to 14 billion crowns ($1.52-$1.64 billion) up from 9.9 billion in 2014 as a result of the agreement.
Ericsson Chief Intellectual Property Officer Kasim Alfalahi said the agreement was broad, covering the latest 4G-LTE generation of mobile technology, as well as the earlier 2G and 3G technologies.
"It means we can continue to work with Apple in areas such as 5G radio network and optimization of the network," Alfalahi told Reuters
UBS analysts believe the deal includes a catch up payment of 3.6 billion crowns and a one off payment of 0.5 billion crowns for legal fees. Ericsson is estimated to receive 775 million crowns per quarter in licensing fees from Apple or about 0.5% of iPhone and iPad revenue.
Ericsson's operating profit is predicted to jump 13% in 2015 and 10 percent in 2016 as a result of the agreement.
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Ericsson's technology that helps smartphones and tablets connect to mobile networks was previously licensed for use by Apple; however, the license expired two years ago and negotiations failed to bring about a new deal. Ericsson filed a lawsuit against Apple in January.
The two companies have now reached a deal.
Ericsson on Monday estimated overall revenue from intellectual property rights in 2015 would hit 13 to 14 billion crowns ($1.52-$1.64 billion) up from 9.9 billion in 2014 as a result of the agreement.
Ericsson Chief Intellectual Property Officer Kasim Alfalahi said the agreement was broad, covering the latest 4G-LTE generation of mobile technology, as well as the earlier 2G and 3G technologies.
"It means we can continue to work with Apple in areas such as 5G radio network and optimization of the network," Alfalahi told Reuters
UBS analysts believe the deal includes a catch up payment of 3.6 billion crowns and a one off payment of 0.5 billion crowns for legal fees. Ericsson is estimated to receive 775 million crowns per quarter in licensing fees from Apple or about 0.5% of iPhone and iPad revenue.
Ericsson's operating profit is predicted to jump 13% in 2015 and 10 percent in 2016 as a result of the agreement.
Please follow iClarified on Twitter, Facebook, or RSS for updates.