Analyst Chris Whitmore with Deutsche Bank, in a note to investors on Monday, offered his view on the continued lawsuits between Apple and Android handset makers, which include Samsung, HTC and Motorola. He believes that the ultimate outcome of the litigation will add “significant value” for Apple shareholders.
Neil Hughes of AppleInsider writes:
Whitmore sees two potential outcomes of the ongoing litigation, both of which are favorable to Apple. Either the iPhone maker obtains a licensing fee for the sale of each Android device, or Apple could secure bans on some devices and take 25 percent market share from Android.
“Under the first scenario, we believe a $10 per (software) licensing deal would accrue roughly $35 per share in value to Apple stock price,” he said. “Under the second scenario, we estimate the incremental value to Apple shareholders would be 7-8 (times) higher.”
“The upside potential associated with an outright win is so large we don’t expect Apple to settle anytime soon — particularly not for the $5-10 per unit number that has been speculated in the press,” Whitmore said. He believes litigation will go well into 2013 in a “long, drawn out process.”
Microsoft has taken a different tack in its dealings with Android based handset makers, It’s estimated that Microsoft receives $5 from the sale of every HTC smartphone. Microsoft also receives royalties from Samsung.
Whitmore also believes the more than 200 patents and patents pending related to multi-touch technology that Apple controls are “largely undervalued”, and sees Apple obtaining $10 per Android handset if it wins its legal battles, adding $35 to the company’s share price.
Hughes continues, “But licensing deals would leave a lot of potential money on the table. If Apple were to win outright and courts were to ban Android handsets or severely limit the features of Android, he sees “enormous” financial benefits for Apple, potentially adding $261 to the company’s stock price.”
And the lawyers just keep getting richer…
