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Apple Could Owe Nokia as Much $1B, Report Says
By: Michelle Maisto
2009-10-23
Article Rating:    / 15
There are 20 user comments on this Mobile & Wireless story.
Nokia's lawsuit against Apple alleging that the iPhone infringes on Nokia's patents may cost Apple in terms of public opinion as well as financially. It's also bad timing, says an analyst, coming alongside Microsoft's strong launch of Windows 7.The lawsuit Nokia filed against Apple on Oct. 22
could cost the iPhone maker up to $1 billion, according to reporting by Reuters.
Nokia
is alleging that the iPhone infringes on 10 patents held by Nokia that are
relevant to wireless data, speech coding, security and encryption. And while
approximately 40 companies pay to license Nokia's intellectual property, Apple
does not.
Charles King, an analyst with Pund-IT, told eWEEK that the estimate The New York Times worked out seems more
reasonable, in which Nokia would receive a 2 percent royalty, or approximately
$12, for each iPhone Apple has sold. Based on sales of 34 million handsets,
compensation could be over $400 millionand that's before any possible
penalties.
It's not as sexy a number as $1 billion, "but it would still be a nice piece
of change for Nokia," King said.
"According to Nokia, they've been telling Apple for months now that they
owe them money for the patents they're using, and Apple has refused to pay them
anything," he continued. "From Nokia's point of view, they've tried
the carrot and to be nice guys, and now it's time to bring out the stick."
In a statement Nokia released Oct. 22, Ilkka Rahnasto, Nokia vice president of
legal and intellectual property, said, "By refusing to agree to
appropriate terms for Nokia's intellectual property, Apple is attempting to get
a free ride on the back of Nokia's innovation."
Nokia additionally reported in the statement that it has spent approximately 40
billion Euro, or $60 billion, on R&D over the last two decades and has more
than 10,000 patent families. King says as far as he knows, Nokia's IP is
necessary for building phones, and the other phone makers consequently pay
Nokia for the licensing.
"Cupertino seems to be the one bad apple out of the bunch,"
King mused.
How the lawsuit, and Apple's reaction, will play out likely depends on how the
story is spun publicly. Will Apple be perceived as the bad guy? "Nokia's
evidence that they're owed a payment seems to be very strong. The weight of
this may rest with Apple having to prove ... they're not liable," King
said.
He added that it could also prove damaging for Apple if the suit affects its
stock price. "Apple's been seen to be relatively bulletproof on the
iPhone, and if the case goes in Nokia's favor, this could create a sense that
there's a weakness there."
A third factor may be Microsoft's
Oct. 22 launch of Windows 7.
"With Microsoft coming out of the gate very strongly with Windows 7, the
last thing Apple needs is a distraction [involving] what has proven to be their
strongest product, outside of the iPod," King said.
That said, whatever money Nokia might get from Apple still wouldn't be enough
to put the ailing phone maker back on its feet. While Nokia controls the
majority of the mobile handset market, on Oct. 15 it announced fiscal
third-quarter losses of approximately $838 million, amounting to a loss of 19.8
percent year over year.
"Any amount of money is welcome money," King said, "but they've
got other fish to fry in order to be as healthy as they'd like to be."
| | Reader Comments: Apple Could Owe Nokia As Much $1 Billion, Report Finds | | >>> Post your comment now!
| | Nokia RocksNot to offend but imo Nokia has the sweetest phones: cool look, excellent reception and cam quality. Their only problem is their over-the-top... Posted At: 10-26-09 By: JustMe | | | | | | | | | | | | If anything Apple will gain supportI don't know about other people but I am sick of all of these silly patent lawsuits. I doubt Apple used Nokia's actual code in the iPhone. If they... Posted At: 10-26-09 By: Brian | | | | | | FUDThis is obviously FUD. But it does illustrate how ludicrous IP law has become and that it does little to advance public good. Posted At: 10-24-09 By: arw | | | | | | Why would the public care?Why would this idiot analyst believe that the public could possibly care about Nokia's lawsuit? It's just simple business between two giant... Posted At: 10-24-09 By: David McElroy | | | | | | Nokia's "timing"Well, well! Nokia and Microsoft entered an Alliance in mid August. Essentially, Nokia will make a smart phone with Microsoft innards. So, why would... Posted At: 10-24-09 By: Gray Eagle | | | | | | Desperate Nokia, Shameless Windows 7 Plug"Thats why claiming that Apple is attempting to get a free ride on the back of Nokias innovation is about as shamelessly bottom feeding as Nokia... Posted At: 10-24-09 By: slappy | | | | | | >>> Post your comment now! | | | | | |
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