All we have are broad strokes at this point. In a press release, the two companies announced a "global" agreement that dismisses all current litigation and includes a 10-year licensing pact covering patents held by both companies. All other terms are confidential.
A little history
How important is this deal? Call it the closing of one chapter in a very full book.
Apple first targeted HTC in 2010. About a year ago, the International Trade Commission mostly sided with Apple in ordering a ban on HTC smartphone shipments to the United States. At the time, HTC insisted the ruling was a win because the body didn't rule comprehensively in the Apple's favor. Some patents weren't infringed.
So infringing on fewer patents equals victory? Talk about spin.
Thanks to Walter Isaacson's biography of the man, we know that the late Steve Jobs was out to destroy Android. Patent suits were and still are a part of the strategy. A battle with Samsung is ongoing (but trending Apple's way), while an old tussle with Google's (NAS: GOOG) Motorola Mobility unit isn't going as well as the Mac maker would like.
Apple's targeting of HTC has been much more effective. Indeed, the company has mostly suffered since introducing its own touchscreen phone in the U.K. a month before the iPhone's first appearance in the U.S., in July 2007:
Year-over-year revenue growth
Returns on capital
Source: S&P Capital IQ.
*Trailing 12 months.
Troubling numbers, right? HTC's recent performance is more reflective of Nokia (NYS: NOK) and Research In Motion (NAS: RIMM) than Samsung. The former two have seen revenue decline sharply as latter's sales surged 20%. Samsung's gross margins are also on the rise.
All of which brings us to the question: Are the Android wars ending? Not likely. Instead, the theory posited by Darrell Etherington at TechCrunch seems to be much more on target: Apple couldn't do much more to hobble HTC, so it settled to save money on legal fees.
Meanwhile, the war with Samsung goes on. Will investors benefit? There's plenty at stake: iPhone-related products and services already accounted for more than $80 billion, or 51%, of Apple's fiscal 2012 revenue. Huge component commitments suggest even bigger numbers in fiscal 2013, but there's also a lot more to this story than just handset sales.
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The article Are the Android Wars Finally Ending? originally appeared on Fool.com.
Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakersstock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple and Google at the time of publication. Check out Tim's Web home, portfolio holdings, and Foolish writings, or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.The Motley Fool owns shares of Apple and Google. Motley Fool newsletter services have recommended buying shares of Google and creating a bull call spread position in Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.
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