Apple Inc (AAPL): Pay Samsung, Get Paid Via Google Inc (GOOG)

Apple Inc (NASDAQ:AAPL) might be more of a flow-through for money in the new future of technology, as the licensing deal becomes ever more ubiquitous, right behind the patent-infringement lawsuit. Apple is competing directly with many companies in terms of market share when it comes to computers, smartphones and tablets – especially in the mobile devices – and although it runs its own ecosystem, it also has licensing deals with many of the “competitors” to the point that Apple Inc (AAPL) is actually trying to win the market while at the same time rooting for the competitors to do well themselves.

Apple Inc. (AAPL)

There are a couple of examples of these types of relationship in the tech world, which on the one hand seem to show a lack of innovation in the industry nowadays, and also the relative rarity of the true siloed ecosystem where a company only relies on itself to produce its devices. Apple Inc (NASDAQ:AAPL) had been known for years for its proprietary ecosystem, but it has been paying competitors like Samsung Electronics Co. Ltd. for components for several devices. And now, Samsung has leveraged its ability to be the only component supplier for some Apple Inc (AAPL) devices, reporting recently that it is raising its price for components by 20 percent, which is a surprise to Apple. However, as Apple could not find an adequate replacement supplier, it has agreed to the new cost.

On the other side of the coin, Apple Inc (NASDAQ:AAPL) may end up making a windfall from competitors who are trying to win the smartphone and tablet wars – and even succeeding at doing so. There is a report out that indicates the very real possibility that Apple and Microsoft Corporation (NASDAQ:MSFT), thanks to licensing deals they’ve made with Android maker Google Inc (NASDAQ:GOOG) or its hardware partners, may make six times more than Google on every Android device that is sold. As an example, Apple just signed a deal with HTC, one of several Android handset markets, in which Apple will receive $6 to $8 from HTC for every device it sells next year; by contrast, it is reported that Google Inc (GOOG) could only make about $2 per device. Microsoft (MSFT), which has been working on licensing contracts with several Android partners for years, already has deals in place where it could receive as many as $5 per device – and we’re talking up to $5 for every Android device made by Samsung, Acer and LG, among others. So even though Microsoft is only trying to break into the smartphone space with its Windows Phone operating system, it is already gaining revenue from the 75-percent market share that Android owns.

What do you think about these deals? How do you think Apple Inc (NASDAQ:AAPL) investors like Julian Robertson of Tiger Management would see these deals? Would you strengthen your position in Apple, especially since it is on sale? Or would you wait until other licensing deals come to light and the litigation stops? Will the litigation ever stop?

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!