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Nokia and Apple Agree to Patent Licensing, While Nokia Drops to No. 3 in Smartphones

Nokia and Apple Agree to Patent Licensing, While Nokia Drops to No. 3 in Smartphones

Time to kiss and make up. Nokia has announced that it entered a patent license agreement with Apple to settle all patent litigation between the two companies.

From the Nokia Press Release:

Nokia and Apple [will withdraw] 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 Nokias industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market.”

The litigation in a nutshell, according to The Wall Street Journal:

Nokia first demanded royalties [in 2009] after claiming that Apple’s iPhone had violated 10 patents, following up shortly after with additional claims against the iPad. Apple countersued, and in March Nokia filed an additional complaint with the U.S. International Trade Commission saying that Apple had infringed Nokia patents “in virtually all of its products.”

It may be too little, too late for Nokia. According to a report by CNET an analyst with Nomura Securities is “forecasting that Samsung takes the No. 1 position in smartphones in Q2” and will extend its lead to “20.4 percent in Q3 2011.” Nomura said Apple will be number 2 in smartphone market share with 17 percent, while Nokia is “expected to drop from its current 25 percent to about 16 percent.”

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