Ericsson has filed another round of patent infringement lawsuits against Apple in the latest salvo between the two companies over royalty payments for the use of 5G wireless patents in iPhones.
Sweden’s Ericsson has filed another round of patent infringement lawsuits against Apple in the latest salvo between the two companies over royalty payments for the use of 5G wireless patents in iPhones. The two companies have already sued in the United States after negotiations broke down over the renewal of a seven-year licensing agreement for telecommunications patents first concluded in 2015.
Ericsson filed an initial lawsuit in October, claiming Apple was trying to unduly slash royalty rates, while the iPhone maker filed a lawsuit in December accusing the Swedish company of using “strong-arm tactics to renew patents.
“Given that the previous agreement expired and we were unable to reach an agreement on the terms and scope of a new license, Apple is now using our technology unlicensed,” a spokesperson said. ‘Ericson.
Apple did not immediately respond to a request for comment.
Patent lawsuits are quite common among tech companies, as each dollar saved could represent significant sums over the life of the deal, as companies such as Ericsson charge between $2.5 and $5 for each 5G handset. .
The Swedish company invests approximately $5 billion annually in research, has a portfolio of more than 57,000 patents, and royalties from its patent portfolio represent approximately one-third of its operating profit.
Ericsson last year settled patent lawsuits with Samsung after months of legal battles that temporarily affected its quarterly results. Pending contributions are generally cleared after a settlement is reached.
Big Tech needs big profits with multiples under fire: Tech Watch
(Bloomberg) Tech stocks stumbled in the new year, with the Nasdaq 100 index down about 6% on fears that the Federal Reserve’s efforts to fight inflation could dampen valuations in the sector. The benchmark plummeted again on Tuesday, with Facebook parent Meta Platforms Inc. dropping as much as 4.1% as bond yields rose again.
So if there was ever a time when megacaps like Apple Inc. and Microsoft Corp. showing surprisingly strong earnings growth is now. Unfortunately for the bulls, that is not what is expected for Q4 results.
With Citrix Systems Inc. set to release earnings on Wednesday, earnings for S&P 500 technology companies are expected to rise 15% after three consecutive periods of growth above 40%, according to data from Bloomberg Intelligence. Estimates are worse for the heavyweights – Apple, Microsoft, Amazon.com Inc., Google parent Alphabet Inc. and Facebook owner Meta Platforms Inc. Their profits are expected to rise just 5%, the slowest since the second quarter of 2020.
“Earnings are of utmost importance right now to maintain balance as rates rise,” said Michael Casper, equity strategist at Bloomberg Intelligence. “It’s critical that these companies meet or exceed estimates just to tread water.”
The tech sector, which includes many companies valued primarily on the promise of future earnings, has come under pressure due to soaring US Treasury yields that are used to gauge long-term earnings in today’s dollars. today. The higher yields rise, it is thought, the less those future profits are worth now, placing more emphasis on bigger profits to make up the difference.
So far, most of the carnage has taken place in the corners of the market with the highest valuations such as software companies and innovation stocks championed by Cathie Wood’s ARK Investment Management. Zoom Video Communications Inc. and DocuSign Inc., for example, lost more than half of their market value due to the spikes. Megacaps like Apple, down about 5% from a record, held up relatively well.
According to Kristina Hooper, chief global market strategist at Invesco, many U.S. tech stocks are treated as a “safe harbor” because of their strong earnings, strong balance sheets and mature businesses.
Technology “is the ultimate secular growth game,” she said in an interview. “There will be more spending on cybersecurity, cloud computing, software, all these big areas of technology.”
The sector has been among the most reliable in beating Wall Street projections. Last quarter, more than 90% of companies in the S&P 500’s information technology group beat earnings estimates, the best performance among the index’s major sectors.
Don’t expect a repeat, says Stephen Hoedt, managing director of equity research at Key Private Bank.
“We’ll probably see earnings surprise on the upside over the quarter and over the year, but I don’t think we’ll likely see the same level of beatings that we’ve seen over the last few quarters,” said he declared.
Technical table of the day
The benchmark semiconductor stock index has had a strong run over the past six months, topping the Nasdaq 100 index. Now comes a test as Intel Corp. and Advanced Micro Devices Inc. are preparing to declare their income. Inventories have risen due to unprecedented demand for chips used in everything from refrigerators to cars, leading to a severe crisis in 2021.