According to an estimate by UBS analyst Timothy Arcuri, Apple is estimated to have paid Qualcomm somewhere between $5 billion and $6 billion to settle the litigation, CNBC is reporting.
Based on Qualcomm’s guidance that it expects earnings per share to increase by $2 as a result of the settlement, the analyst estimates that Apple likely agreed to pay between $8 and $9 in patent royalties per iPhone.
The settlement is “a solid outcome for Qualcomm and certainly better than the [roughly] $5 [royalty payment] assumption we had been making,” wrote Arcuri. The analyst further wrote that the one-time payment was likely for royalty payments that Apple had stopped paying when the two companies were involved in litigation:
If Apple does pay between $8 and $9 in royalties per iPhone it would be a significant increase over the $7.50 in royalties that it previously paid Qualcomm per phone, according to Apple COO Jeff Williams’ testimony in an FTC trial.
When CNBC asked Qualcomm CEO Steve Mollenkopf how much Apple pays it per phone on Wednesday as well as the size of the one-time payment, he declined to answer. “Well, a deal like this, there’s a lot of value back and forth, and it’s just best to keep it confidential,” he said.
Neither Apple nor Qualcomm has issued any comment on the matter.