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Apple signs iPhone patent deal with Interdigital

The seven-year agreement covers the current iPhone and looks like it cost Apple about $20 million, plus ongoing royalties.

Tom Krazit Former Staff writer, CNET News
Tom Krazit writes about the ever-expanding world of Google, as the most prominent company on the Internet defends its search juggernaut while expanding into nearly anything it thinks possible. He has previously written about Apple, the traditional PC industry, and chip companies. E-mail Tom.
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Tom Krazit
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Apple has signed a patent-licensing agreement with a company called InterDigital for what appeared to be $20 million, plus ongoing royalties, that covers the current iPhone and hints at a 3G successor.

Interdigital broke the news in a filing with the Securities and Exchange Commission Thursday, amid all the hubbub related to the iPhone pricing flap. The company said it has signed a seven-year licensing agreement with Apple retroactive to iPhone Day that covers the technology used in the iPhone.

Interdigital's cashing in on the iPhone with a patent-licensing deal. CNET Networks

Interdigital develops technology that gets mobile phones onto cellular networks. The company's products and designs are used for older cellular standards, like the EDGE network used by the iPhone, but is focusing most of its current development on designing technology for the WCDMA (wideband code division multiple access) and HSDPA (high-speed downlink packet access) standards that power faster 3G networks.

That would imply that Apple's got a faster 3G iPhone in the works, although that's hardly an unexpected development. The company wants to enter the European mobile phone market in 2007, where 3G networks are far more common. And I think it's pretty safe to say that if Apple is still selling iPhones in seven years--when the license runs out--they'll probably have a 3G iPhone or two.

Interdigital didn't specifically address the terms of the agreement in its filing with the SEC. But Friday morning it issued a press release increasing its third-quarter guidance for patent-licensing revenue to a range of $55.5 million to $56.5 million, up from its previous guidance of $53.5 million to $54.5 million. Plus, the company said it "expects to receive a $20 million payment in the near future in connection with a recently signed license agreement. The revenue associated with this new agreement is reflected in this updated guidance." Hmm.... Investors sure liked the news, driving Interdigital's stock up almost 13 percent just before the close of trading Friday.

When CEO Steve Jobs announced the iPhone at Macworld in January, he made sure to note that Apple had filed for more than 200 patents related to the iPhone. But Apple doesn't develop cellular networking technology, of course. An Apple representative did not immediately return a call seeking comment on the Interdigital patent deal.