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Nokia lawsuit could cost Apple up to $1 billion

updated 01:25 pm EDT, Mon October 26, 2009

Analysts dispute possible payments

A Nokia patent lawsuit could cost Apple as much as $1 billion in back payments, argues Strategy Analytics' Neil Mawston. The analyst tells Reuters that because of the over 34 million iPhones Apple has shipped to date, the company could owe anywhere between $200 million and $1 billion, depending on the terms of a settlement. Pund-IT analyst Charles King suggests that a $400 million figure more likely, assuming a 2 percent royalty scheme.

Such a demand could be comparatively lenient on the part of Nokia, which is said to have been pressuring Apple for months to pay royalties on patents covering wireless data, speech and encryption. The Finnish company claims to have invested over 40 billion in research and development over the years, an effort resulting in over 10,000 patent families. "It is almost inconceivable that someone can produce a mobile phone without using Nokia patented technologies," comments CCS Insight research director Ben Wood.

Some form of Nokia victory in the lawsuit may be essential, as the company's smartphone marketshare dropped from 41 to 35 percent in the most recent quarter, mainly giving up ground to Apple and RIM. As a whole the company posted a $1.36 billion loss during the period, which could be alleviated with a new royalty source. Nokia nevertheless remains the world's dominant cellphone maker.



By Electronista Staff
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  1. Feathers

    Grizzled Veteran

    Joined: Oct 1999

    +4

    cross-licensing

    Tried a Nokia touch-phone yesterday and it is utterly lousy. Nokia need a cross-licensing agreement but nothing says that Apple won't just pony up the royalties and NOT cross-license, in which case, Nokia are utterly screwed. Buh-bye!

  1. danviento

    Fresh-Faced Recruit

    Joined: Dec 2005

    -2

    u sure?

    I dunno feathers, maybe with $1 billion, Nokia can keep a couple engineers and designers employed long enough to keep them afloat, along with them still having the highest handset sales of any mfg in the cell industry.

  1. Eldernorm

    Fresh-Faced Recruit

    Joined: Sep 2007

    +2

    Odd ball shot for Nokia

    Nokia has known about Apples systems for 2 years now. You know that this is more about leveraging power vs actual patents. I am sure there will be some kind of settle out of court, but Nokia is doomed to be the top seller of cheap phones.

    100 million sold and only lose $1 on each. LOL

    Just a thought.
    en

  1. testudo

    Forum Regular

    Joined: Aug 2001

    -2

    Re: Odd ball shot


    Nokia has known about Apples systems for 2 years now. You know that this is more about leveraging power vs actual patents.


    It also states they've been pressuring them for months about licensing, which probably means they've been in talks for longer than that. And what do you want Nokia to do? Sue Apple the day the iPhone comes out? They couldn't do that, since they wouldn't know whether their patents are being defiled by Apple until they research their product.

    I am sure there will be some kind of settle out of court, but Nokia is doomed to be the top seller of cheap phones.


    If you're raking in a couple billion a year in licensing royalties, what do you care if you're also not the #1 seller.

  1. tonywong

    Junior Member

    Joined: Feb 1999

    +6

    This is not going to be resolved quickly

    Apple's engineers and lawyers are probably ripping apart every Nokia phone they can find to discover what Apple patents that Nokia is infringing upon. If they find enough leverage they will go to Nokia and force a cross licensing agreement of some kind and this suit will be dropped.

    If not, they will both be fighting over the patents for years to come.

  1. aristotles

    Grizzled Veteran

    Joined: Jul 2004

    +1

    Nokia wants to charge 15 percent of the sale price

    Nokia is not interested in recouping costs but rather placing a barrier for entry by new competitors. They expect anyone not in their cartel of companies to pay 15 percent of the sale price of a handset. It is unknown if this "sale price" is the cost of the device to carrier or the subsidized price paid by the customer.

    The EU should investigate this anti-competitive practice.

  1. luckyday

    Fresh-Faced Recruit

    Joined: Apr 2008

    -2

    Help

    Please help. I am trying to determine who is a bigger moron: tonywong or aristotles. Any suggestions?

  1. shawnde

    Fresh-Faced Recruit

    Joined: Apr 2008

    +1

    re: Help

    I can help you : you're the BIGGEST idiot on this forum; even ahead of Testudo !!

  1. luckyday

    Fresh-Faced Recruit

    Joined: Apr 2008

    -1

    shawnduh

    Please learn to read the question. It's something kids learn in grade 5. Perhaps I am the "biggest idiot" on this forum.... regardless that doesn't exclude tonywong from being a bigger moron than aristotles or vice versa.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    +1

    Re: Nokia wants

    Nokia is not interested in recouping costs but rather placing a barrier for entry by new competitors. They expect anyone not in their cartel of companies to pay 15 percent of the sale price of a handset. It is unknown if this "sale price" is the cost of the device to carrier or the subsidized price paid by the customer.


    Excuse me, but this is ludicrous. Maybe you missed the point where they're claiming they own patents to various things. That gives them the right to deny use of, or require payment from, anyone who is interested in using said patent.

    There is no law that states that a patent holder must allow those who want to use their patent that right. Nor is there any law that states how much they can charge for use of that right. Nor is there anything that says they need to just recoup costs.

    Or maybe you want to also force apple to license their patents to their iPhone technologies to MS, RIM, Motorola, etc, so everyone can duplicate it? As long as they pay, what's wrong with that?

    The EU should investigate this anti-competitive practice.

    A patent is, by default , anti-competitive. And that's the whole point!

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