Reuters reports that Apple may have to pay Nokia up to $1 billion if it loses the lawsuit brought by Nokia.
The leader of world’s cell phone industry filed the suit on Thursday. Nokia claims that Apple infringed 10 patents in technologies like wireless data transfer, a key factor in the success of iPhone and accuses Apple of trying to hitch a “free ride” on Nokia’s technology investment.
Apple came to mobile phones industry later and now owns the 15% of the smartphone market, but it has limited intellectual property assets compared with rivals, when all vendors work under cross-licensing agreements.
According to Strategy Analytics Apple could have to pay Nokia anything between $200 million and $1 billion. Apple has sold 7.4 million iPhones for an average price $566 during the last 3 months and Nokia has a case to demand such an ammount of money.
“It is almost inconceivable that someone can produce a mobile phone without using Nokia patented technologies,” said Ben Wood, research director at CCS Insight.
The representatives of Nokia said that they had made several price offers to Apple on per patent and on portfolio basis, but the U.S. firm had declined all of them.
The analysts explain that the vendors who have been in the industry for a long time pay a few percent, but the newcomers pay around 15% of their revenue from selling 3G phones, for 2G – the rate is lower.
“Intellectual property licensing costs create a significant barrier for late entrants into the mobile phone space. As a result they become net payers to the big established players such as Ericsson, Motorola, Nokia and Qualcomm,” CCS Insight’s Wood said.
Nokia said that its apatented techlogies were used in all iPhones, icluding the original GSM model and the following 3G models.
“This issue has the hallmarks of the iPhone name and the deal Apple struck with Cisco for the use of this name. They wanted it, and needed it, in the same way they need Nokia’s technologies,” said Steven Nathasingh, managing director of research firm Vaxa Inc. “The smart phone market share issue is a factor relative to the timing of this suit. This has to create concern for Nokia,” Nathasingh said.
