“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.”
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“‘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.”
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