Saturday, August 11, 2012

Apple offered Samsung a patent licensing deal at $30 per smartphone, $40 per tablet

It's estimated that HTC pays Microsoft $10 per Android phone for patent licensing, and that Samsung pays Microsoft $12 - $13. That seems expensive enough in an industry like mobile, but Apple, which is suing Samsung over patent infringement, tried to get Samsung to pay 2.5 to 3.5 times as much in licensing fees.

As the Apple - Samsung lawsuit trial continues, we learn more and more information. Despite Steve Jobs' famous statement that he would go "thermonuclear" on Android, Apple, realizing how important a partner Samsung was, offered to license its portfolio of patents on the order of $30 per smartphone and $40 per tablet.

In an Oct. 5, 2010 presentation to Samsung, Apple said,

“Samsung chose to embrace and imitate Apple’s iPhone archetype. Apple would have preferred that Samsung request a license to do this in advance. Because Samsung is a strategic supplier to Apple, we are prepared to offer a royalty-bearing license for this category of device.”

Apple also offered to give the Korean giant a 20 percent discount if the Samsung cross-licensed its portfolio back to Apple. In addition to the target of Apple's nuclear devices, Android, Apple sought royalties from Samsung’s non-Android smartphones, including those running the Symbian and its own Bada operating systems.

Obviously, those negotiations between Apple and Samsung didn't come to fruition, as we are now witnessing a trial that could amount to more than $2.5 billion in damages if Apple wins. Apple estimated that in 2010 Samsung would have owed Apple approximately $250 million. Extrapolating that to 2011, it would seem that Samsung could have owed Apple far less if it had agreed to the patent licensing offer.

In fact, that $250 million was far less than Apple was spending on components from Samsung, something that the Cupertino, Calif.-based company has been eschewing, since its worldwide disputes again Samsung entered the legal realm.

The document is one of many that have become public in the case between the two technology giants. Some of them are things that one, or both, of the litigants would have remained hush-hush.

The trial is expected to last until late in the month.

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