Nokia’s patent deal with Apple could benefit Windows Phone

By Tom Warren, on 14th Jun 11 8:39 am with 18 Comments

Nokia and Apple announced a patent license agreement on Monday that settles a long and bitter dispute.

The agreement marks the end of all patent litigation between the two companies and the withdrawal by Nokia and Apple of their complaints to the U.S. International Trade Commission (ITC). Nokia said on Monday that the agreement consists of a one-time payment paid by Apple and then on-going royalties to be paid by Apple to Nokia for the term of the agreement. Neither company revealed specific terms of the contract or its length, noting that they are confidential.

“We are very pleased to have Apple join the growing number of Nokia licensees,” said Stephen Elop, president and chief executive officer of Nokia. “This settlement demonstrates Nokia’s industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market.”

Nokia’s stock suffered recently after the company revealed its second quarter outlook isn’t great. The phone maker downgraded its own outlook and expects device and services net sales to be “substantially below” its previous estimates. The revelations saw the company’s stock price drop by 15% on the NYSE earlier this month. Fears for Nokia’s short and long term prospects grew earlier this month as investors turned their backs on the company.

Research analysts IDC and Gartner have both predicted that Microsoft’s Windows Phone devices will beat iPhone sales by 2015. News of a Nokia patent deal with Apple will likely benefit Windows Phone in the long term. Both Nokia and Microsoft are investing a significant amount of money, time and effort into marrying their hardware, software and services to create a unique ecosystem. Additional revenue from Apple’s iOS devices may help Nokia maintain its large spend on research and development, currently estimated at $3.9 billion a year. Nokia’s patent deals with rival firms are also an essential source of revenue from the company, one that appears to have been bolstered by the Apple agreement. Although the terms of the deal are confidential, Nokia and Microsoft stand to benefit from any patent deal that covers GSM technologies. The timing of the deal suggests that Nokia’s decision to use Windows Phone 7 on its devices may have prompted an end to two years of legal wrangling. Apple and Microsoft have both signed a number of cross-licensing agreements in the past so it’s possible that Apple is covered in some respects.

The agreement will also help Microsoft battle Android with its new partner, Nokia. Microsoft has been pursuing a number of Android-based handset makers recently. The company is trying to muscle the vendors into agreeing a patent deal in an attempt to thwart the spread of Android and Chrome OS. Microsoft filed a lawsuit against Motorola in October, claiming their Android handsets infringed nine Microsoft patents. Microsoft and HTC signed a patent agreement last year relating to HTC’s mobile phones running Android. Although the terms of the deal were undisclosed, a Citi analyst recently claimed that the software giant receives $5 per device. The result is that Microsoft generates more income from Android than Windows Phone based on the number of HTC devices shipped with Android. Florian Mueller, an award-winning intellectual property activist, speculates that Android-based devices are highly likely to infringe on the same Nokia patents that Apple has been forced to pay for. We’ll have to wait and see in the coming months whether Nokia moves to tackle Android vendors head-on.

Nokia is now planning to produce a number of Windows Phone devices for release later this year. Nokia has promised to supply a batch of Windows Phone Mango devices and new devices every few months. Nokia’s Windows Phone devices are currently labelled with “W” (for Windows). The first handset is expected to be a variant of Nokia’s X7 device. The prototype is equipped with a WVGA display, Qualcomm QSD8250 chipset and 8MP camera. Nokia is also rumored to be launching a dual-core N8 variant with a 12MP camera, QWERTY touchscreen candy bar phone and a cheaper touchscreen device with less expensive body.

  • http://www.facebook.com/people/Saakhi-Neethan/100002185736812 Saakhi Neethan

    Microsoft>earning income from hTC Android
    Nokia>earning income from apple………….wat a coincidence!

    • http://twitter.com/Salem309 Ahmed Salem

      I can not swallow Microsoft earnings from HTC, but sure I can understand the Nokia case.

    • Anonymous

      that’s stupid…

      the reasons are simply the same. patents infrigment. the reason why you cant swallow is because you hate MS.

    • Anonymous

      that’s stupid…

      the reasons are simply the same. patents infrigment. the reason why you cant swallow is because you hate MS.

    • trashoner

      This is simple. Apple copied a technology from another company and they must pay for it. 2011 is the year of the copy cat for Apple I must say. Copying from Android as well as Windows Phone OS, it seems to me that the company that used to innovate now is having a hard time with their aging phone OS.

    • trashoner

      This is simple. Apple copied a technology from another company and they must pay for it. 2011 is the year of the copy cat for Apple I must say. Copying from Android as well as Windows Phone OS, it seems to me that the company that used to innovate now is having a hard time with their aging phone OS.

    • Trashoner better half…

      Your facts are incorrect trashoner…the iPhone was out way before the Android and Windows Phone OS.  Many features for the Android phone came from the iPhone, just they added flash support to their phones. 

      iOS is still a dominate platform to develop for in the market today.  Andriod OS is also very good and is marketing in alot of way IOS. Windows Phone OS is way behind compared to the two others.

      You need to step back and see over the past 20 years, Microsoft has copied many ideas and technologies from other companies.  Now Apple is experiencing the same growing pains as did Microsoft.  They just need to properly pay whomever created the technology first and not be the new Microsoft.

      You may not like the iPhone or the iOS but its still a good phone just like the Android. 

    • Guest

      He didn’t say they copied them originally. He said 2011. And yes, there is strong evidence to support that. So stfu.

    • http://www.searingarrow.com AlienSix

      It all comes full circle haha

  • Anonymous

    “We are very pleased to have Apple join the growing number of Nokia licensees,” said Steve Elop, with a massive shit-eatting grin.

  • http://twitter.com/kenobeano Keno Butler

    its all about strategic alliances…. microsoft is positioned for the win in a few yrs

    • Gokusan

      I highly doubt that Microsoft will make a comeback. 
      They just do not have an idea on what people want.
      They should stick with gaming consoles and Windows OS and leave the phone market to the others.

    • Morgan Wisbey

      And your opinion is based on what exactly? I have used both iPhone and now own a WP7. I have zero desire to go back to Apple and with the features announced for Mango, I am very excited about this platform. Based on the fact that the new iOS features announced for this fall, since most every new feature is something they “borrowed” from android and WP7, I would argue that Apple no longer knows what people want. Oh and lets not forget they did design a phone that when you held it, the antenna didn’t work. Perhaps they should leave phone market to others who know how to design a phone. Don’t get me wrong. I credit Apple for pushing other phone makers to build better and sexier hardware. Problem is Apple sat on their brilliant creation and in some ways actually went backwards. The sea of icons OS has remained mostly unchanged since 2007.

    • Guest

      Then why is WP7 leading in consumer satisfaction, troll?

    • Grs_dev

      @8b062856c94f4d4ca8a6ae4ac3a237fb:disqus , Imagine that every time you make a stupid statement an innocent child somewhere in the world is shot and when you make an intelligent statement a child somewhere in the world is granted a wish.

      You, just had 3 innocent children killed!

      Now use that concept the next time you want to make a statement and you’ll see how much better your thought process and statements will become!

      You can thank me later.

  • http://twitter.com/UgglyUI UgglyUI

    With openness and freedom in mind, I think this is wrong.

    • Wourelia

      You can´t buy food with openness and freedom.

    • Grs_dev

      @ugglyUI openness doesn’t mean free. When was the last time you paid your rent with open licenses?