Apple, Nokia settle patent dispute, sign new deal
Nokia has settled its legal battle with Apple in a new patent licence agreement and also signed a business deal with the US giant, surprising investors who had expected the dispute to drag on.
The companies on Tuesday said Nokia would receive an upfront cash payment and additional revenues from Apple starting from the current quarter, without giving details. Analysts said the revenue was likely to be higher than a previous deal.
“We are pleased with this resolution of our dispute and we look forward to expanding our business relationship with Nokia,” Apple Chief Operating Officer Jeff Williams said in a joint statement.
A previous patent licence contract between the companies expired last year, and both sides took legal action in December. Apple complained of being overcharged and Nokia responded by accusing Apple of violating technology patents.
In the absence of a new deal, Nokia cut its annual run-rate forecast in December for patent and brand licensing sales to €800 million ($900 million) from €950 million previously. In its latest quarterly report released in April, Nokia stopped giving an annual run-rate forecast altogether.
“(The agreement) moves our relationship with Apple from being adversaries in court to business partners,” Nokia’s chief legal officer Maria Varsellona said in a statement.
Analysts were surprised by the relatively quick resolution, as they had feared a protracted legal dispute.
“For Nokia, it’s good news they got this out of the way, but we still have to wait for details about the financial impact,” said OP Equities analyst Hannu Rauhala.
“The previous annual rate was €150 million, so I assume this to be more, around €500 million.”
Under the new business agreement, Nokia said it would provide network products and services to Apple while Apple would resume carrying Nokia’s digital health products in its retail and online stores.
Rauhala said Apple might have been willing to settle with Nokia as the US company’s patent battle with chipmaker Qualcomm Inc has escalated.
Nokia’s total sales in 2016 were about €24 billion.