Ericsson Signs New Patent Deal with Apple

Earlier this year, Ericsson filed patent infringement lawsuits against Apple in the U.S., U.K, and some other countries in Europe, after failing to reach an agreement with Apple on a global licence for its patents, making it of the biggest legal battles in mobile technology. Today, the Swedish mobile telecom gear maker has announced that it has signed a patent license deal with Apple over technology that helps smartphones and tablets connect to mobile networks, ending its year-long dispute with the Cupertino giant, Reuters reports.

The report notes that following the announcement, Ericsson’s shares went up as much as 8%, as the company highlighted that agreement would pave the way for cooperation between the two firms on future technologies. Ericsson also estimated that its 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, but declined to provide further financial details.

While Ericsson did not specify exactly how much the Apple deal would contribute to sales and earnings, UBS analysts said in a research note it believed the deal meant a catch-up payment of 3.6 billion crowns for 2015, including a one-off sum of 0.5 billion covering items such as legal fees. UBS estimated the agreement would boost Ericsson’s operating profit by 13 percent in 2015 and 10 percent in 2016, providing 775 million crowns per quarter in licensing fees.

Ericsson’s statement notes that the agreement includes a cross license covering both companies’ patents which has resolved all pending patent-infringement litigation between the companies.