Analyst: Android Litigation Offers ‘Significant Value’ for AAPL

Deutsche Bank analyst Chris Whitmore on Monday released a note in which he said that Apple’s litigation against vendors of Android-based smartphones, including Samsung, HTC, and Motorola, promises “significant value” for AAPL shares, according to AppleInsider. Whether Apple secures licensing fees or outright bans on device sales, and thus market share gains, the company’s stock should see strong gains, he said.

Mr. Whitmore wrote: “Under the first scenario, we believe a $10 per (software) licensing deal would accrue roughly $35 per share in value to Apple stock price. Under the second scenario, we estimate the incremental value to Apple shareholders would be 7-8 (times) higher.” He sees an outright ban on Android-based handset sales potentially adding US$261 to Apple’s stock price.

He added: “The upside potential associated with an outright win is so large we don’t expect Apple to settle anytime soon — particularly not for the $5-10 per unit number that has been speculated in the press.” He expects the legal wrangling to become a “drawn-out process” that will last well into next year.

Mr. Whitmore’s chart