After much legal wrangling, Apple (AAPL) is digging deep into its pockets to license Nokia's mobile phone patents. The iPhone maker has conceded that it can't make its shiny iDevices without using Nokia's tech-a-no-logi-cal inventions. So it's good news for Espoo management and Nokia (NOK1V) (NOK) shareholders, for a change.
- On the one hand, Nokia will make something like a billion quid per year from the deal.
- On The Other Hand, isn't it about time the Finnish mobile phone maker made some mobile phones that people want to buy?
Agam Shah reports:
The two companies have been engaged in patent disputes ... since October 2009, when Nokia filed a complaint ... alleging that Apple's iPhone infringed on ... ten Nokia patents covering wireless data, speech coding, security and encryption.
In March this year, Nokia expanded the ... complaint to include an additional seven patents ... "Apple infringes ... Nokia patents in virtually all of its mobile phones, portable music players, tablets and computers."
Stewart Meagher also covers the "nasty tit-for-tat patent spat":
Nokia says it has invested more than ‚¬43 billion in its patent portfolio. ... We can only assume that many of the technologies in the dispute are common to Android. ... It's only a matter of time before Nokia starts pursuing Google.
Having beaten the mighty Apple and its [huge] legal and financial resources, Google will ... think long and hard before taking Nokia on.
How much is going to Espoo? Adrian Kingsley-Hughes thinks he knows:
Rumor has it that Nokia could be pulling in as much as ‚¬8 ... for each iPhone Apple sells. ... And Apple sells a lot of iPhones. ... In the period Jan to Mar ... over 18.5 million handsets.
That could translate into some $200 million in patent royalties. Not a bad day’s work for Nokia..
Paul McNamara is buzzin':
Apple's canned statement issued to media outlets appears defensive ... "Apple and Nokia have agreed to ... enter into a license covering some of each others' patents, but not [most] innovations that make the iPhone unique. We're glad to ... get back to focusing on our respective businesses."
Love him or hate him, Florian MÃ¼ller has to gloat:
This is the very outcome I had predicted on a couple of recent occasions. ... The deal structure is very telling: ... a payment for past infringement [plus] running royalties [says] there's serious money in this for Nokia.
Part of [Nolia's] new strategy is to ratchet up the monetization of its patent portfolio. [Now] Nokia has demonstrated its ability to defeat Apple ... other companies whom Nokia will ask to pay royalties will have to think very hard. ...
Given that Android is in many ways a rip-off of [iOS], Android-based devices are highly likely to [also] infringe. ... This is a sweet defeat for Apple because its competitors ... will also have to pay Nokia.
But Nilay Patel is more nuanced:
Remember, the original conflict was ... about what rate Apple would pay for Nokia’s patents on various “essential” GSM and WiFi-related technologies. ... For all we know, Apple finally decided that simply paying Nokia’s price was cheaper and less risky than ongoing litigation across multiple lawsuits in multiple venues.
Nokia might have decided that having Apple challenge ... some 30-odd patents in multiple venues was too risky. ... Nokia licenses its “essential” patents across the industry, a revenue stream that’s becoming vitally important. ... Putting that source of income under the gun may have simply been too much of a risk.
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Richi Jennings is an independent analyst/consultant, specializing in blogging, email, and security. His writing has previously won American Society of Business Publication Editors and Jesse H. Neal awards. A cross-functional IT geek since 1985, you can also read Richi's full profile and disclosure of his industry affiliations.