“Both Nokia and Apple have remained mum on the financial terms of their patent lawsuit settlement, but a glimpse at the deal Apple was able to broker is expected to be seen in next week’s quarterly earnings report,” Neil Hughes reports for AppleInsider.
“Maynard Um with UBS Investment Research believes Apple was likely accruing a liability in accordance with generally accepted accounting principles, or GAAP, in anticipation of a settlement with rival handset maker Nokia,” Hughes reports. “It’s possible that Apple was ‘over-accruing’ on this liability, a move that could result in a more positive effect on the company’s gross margins for the June quarter.”
Advertisement: Students, parents and Faculty save up to $200 on a new Mac.
“‘If Apple had been accruing for Nokia royalties and brokered a more favorable rate, we believe it could see a 1x benefit to gross margins,’ he wrote in a note to investors on Wednesday. ‘Conversely, if Apple had not been accruing, the 1x ‘catch-up’ would likely have an adverse impact,'” Hughes reports. “Um doesn’t expect Apple’s ongoing royalty payments to Nokia to have a material impact on the company’s bottom line going forward.”
Read more in the full article here.
There might be no light on this matter in Apple’s earnings. The settlement is confidential, and the expenses will be probably diluted through many quarters.
If the settlement is confidential then Apple either got hosed for a higher fee per phone than other manufacturers or managed to pay less than all the others and Nokia will make it up in volume.
Yes, I know, what he said.
Still, my money is on Apple paying less per phone because Apple had the high ground, being overcharged, in the dispute and Nokia was angling for a patent swap that it no longer needs.
The whole point of Apple not agreeing to pay the fees initial was that they were disproportionally high. So if Apple now agreed to cancel the trial then it must be because they finally got sane percentage fee.
Only thing is, settlement didn’t happen in the qtr aapl is going to report. So why would it be in this qtr results? I am not CPA but I would think it would be in next qtr and aapl will tell wall st what to expect.
I think Apple has been overaccruing for this settlement and it will have no material impact, otherwise we would have already seen a statement.
Patent theft is a crime 😉