Apple will Pay Nokia $600 Million upfront, and $550 Million Yearly Post That.
According to Deutsche Bank analyst Kai Korschelt, The dying breed Nokia stands to sustain in the market thanks to is greatest rival today – Apple. Apple and Nokia announced early on Tuesday that they had reached an agreement regarding a series of patent disputes filed by each company over the past few years.
Korschelt estimates that Apple will give Nokia a $608 million lump-sum payment up front. post that, Apple will like pay Nokia a 1% royalty on all iPhones sold each quarter as a licensing fee. At the current market sale rate, the fruit company will pay the team at Espoo a whopping $550 Million in yearly licenses.
[toggle title_open=”Close the Release” title_closed=”Read the Nokia release from Tuesday” hide=”yes” border=”yes” style=”default” excerpt_length=”0″ read_more_text=”Read More” read_less_text=”Read Less” include_excerpt_html=”no”]Nokia enters into patent license agreement with Apple
Apple payments to Nokia settle all litigation and have positive financial impact
Espoo, Finland – Nokia announced that it has signed a patent license agreement with Apple. The agreement will result in settlement of all patent litigation between the companies, including the withdrawal by Nokia and Apple of their respective complaints to the US International Trade Commission.
The financial structure of the agreement consists of a one-time payment payable by Apple and on-going royalties to be paid by Apple to Nokia for the term of the agreement. The specific terms of the contract 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.”
During the last two decades, Nokia has invested approximately EUR 43 billion in research and development and built one of the wireless industry’s strongest and broadest IPR portfolios, with over 10,000 patent families. Nokia is a world leader in the development of handheld device and mobile communications technologies, which is also demonstrated by Nokia’s strong patent position.
This agreement is expected to have a positive financial impact on Nokia’s recently revised outlook for the second quarter 2011 of around break-even non-IFRS operating margin for Devices & Services.[/toggle]