Nokia and Apple Settle
Nokia is a company searching for a future, but the new settlement with Apple will give it some time. BVR’s IP Blog reported earlier CEO’s Stephen Elop’s plaintive report to the Nokia faithful that called for leaping into “icy waters,” adopting the Microsoft platform and continuing to aggressively protect its IP (in 2010, Nokia filed infringement suits against Apple).
Though the terms of the agreement were not announced in Tuesday’s press release, analysts have a pretty good idea of what it would take to settle and predict Android is now in Nokia’s sights.
In addition to an upfront payment of $600M+, ZDNet guestimated Nokia would be getting $11.50 in revenue for each iPhone Apple sells, a figure that would bring Nokia close to $800M in annual royalty revenues. That seems a bit high. Bernstein reportedly estimates that the upfront payment exceeds $700M, butthe ongoing license is less (1.1%), similar to the way Apple compensates Qualcomm. (By way of comparison, half of ktMINE’s database of telecommunications agreements use a royalty base of License Net Sales and have median royalty rates ranging from 6% to 10%, so, if Bernstein is correct, it looks as if Apple bought a good royalty rate with its upfront payment.)