Ericsson Secures Royalty Payments From iPhone Sales Following Apple Patent Settlement

Ericsson now has a vested interest in iPhone sales. That's because the two electronic firms came to terms on a global patent license agreement that will see Apple pay Ericsson a royalty on every iPhone it sells for the next seven years. It also includes an initial payment, presumably to cover royalties from iPhone sales while the matter has been in litigation over the past year.

It's a cross licensing deal that covers patents relating to both companies' standard essential patents (including the GSM, UMTS, and LTE cellular standards), while also granting certain other unnamed patent rights. Perhaps most importantly, the deal puts to an end any and all pending patent infringement litigation between the two.


"We are pleased with this new agreement with Apple, which clears the way for both companies to continue to focus on bringing new technology to the global market, and opens up for more joint business opportunities in the future," said Kasim Alfalahi, Chief Intellectual Property Officer at Ericsson.

For the 2015 period, Ericsson estimates revenue from the deal to reach 13 billion to 14 billion Swedish Krona, or about $1.53 billion to $1.65 billion in U.S. currency. That's not an insignificant sum and with Apple routinely reporting record iPhone sales, the seven-year agreement bodes well for Ericsson.

Investors seem to agree. Following the announcement, shares of Ericsson stock jumped nearly 8 percent in pre-market trading and 5 percent in early morning trading.