Ericsson signs patent deal with Apple, shares soar

Mon Dec 21, 2015 7:43am EST
 
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By Sven Nordenstam and Olof Swahnberg

STOCKHOLM (Reuters) - Swedish mobile telecom gear maker Ericsson said it had signed a patent license deal with Apple Inc over technology that helps smartphones and tablets connect to mobile networks, sending its shares up much as 8 percent.

The deal ends a year-long dispute with Apple, one of the biggest legal battles in mobile technology and Ericson said it would pave the way for cooperation between the companies on future technologies.

Ericsson had said in its filing to a U.S. district court in January that Apple's license to use the technology developed by the Swedish firm had expired, and that two years of negotiations had not led to a new deal.

Ericsson on Monday estimated 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.

An Apple spokesman in Europe had no immediate comment, referring to a January statement by the firm where it said it had deep respect for intellectual property and was willing to pay a fair price for rights to patents.

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.

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An Apple logo is seen inside the Apple Store in Palo Alto, California November 13, 2015. REUTERS/Stephen Lam