UPDATED 11:08 EDT / DECEMBER 29 2011

Apple Could Make $7M Daily Android Licenses in Lieu of Lawsuits

How could Apple easily earn $7 million per day? According to Kevin Rivette, managing parter at 3LP Advisors, specializing in intellectual property, Apple would be better off negotiating licensing agreements with Android manufacturers rather than sue them. What will Apple get in return?  Up to $10 in royalties on every Android device sold.

In an interview with Bloomberg Rivette said that the tactics pursued by Apple on litigation against Android is basically wrong. He believes that the soundest option for Apple would be to draw up licensing agreements, achieving up to $10 profit on each Android device.

“A scorched-earth strategy is bad news because it doesn’t optimize the value of their patents — because people will get around them,” Rivette said. “It’s like a dam. Using their patents to keep rivals out is like putting rocks in a stream. The stream is going to find a way around. Wouldn’t it be better to direct where the water goes?”

Going the way of Microsoft

You’ll recall that Microsoft is already in similar agreements with numerous android mobile manufacturers, and making profits up to $5 for every HTC Android device sold. For Microsoft, revenue from these licensing agreements is more than its own Windows Phone sales.

Microsoft is also fighting battle with Motorola and other Android providers. The company is claiming that Android-based smartphones made by Motorola Mobility infringed on seven of Microsoft’s patents. Microsoft has demanded Samsung to pay $15 for every Android based Smartphone it sells.

Things for Apple, of course, are not exactly about the controversy with Android, but are more about copycatting patent infringements. With over $80 billion dollars in management hand, Apple doesn’t need royalty money from Android devices. Former Apple CEO Steve Jobs said shortly before his death that he had no desire for Apple to license patents to Android manufacturers. Job said that Android is a stolen product, and that he was ready to go “thermonuclear war” to stop Android.

The current patent wars between Apple and the rest of the smartphone industry intensifies. There are tentative successes, like Apple’s recent win over HTC, though HTC quickly released a workaround for its devices, just as Rivette suggested.  There was also a similar development took place in the case of the Galaxy Tab in Germany, with the subsequent release of the slightly modified Galaxy Tab 10.1, but it could still be years before companies are ready with lawsuits over the world play.


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