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Nokia Wins Patent War with Apple--You're Next Android

Nokia has prevailed in its patent battle with Apple and demonstrated the strength of its patent portfolio.

Don't put any dirt on Nokia's coffin just yet--the company still has some life in it. A victory in its patent war with Apple means a new revenue stream for Nokia, and a stronger position to enforce its patent portfolio with other mobile device makers.

Specific terms of the agreements have not been disclosed, but a statement from Nokia says that Apple will pay a one-time lump sum up front, and ongoing royalties as part of a licensing agreement between the two.

This is a huge victory for Nokia, which has been flailing and has been the focus of increased speculation that it will be swallowed up by Microsoft or Samsung. As Nokia seeks to halt its downward slide and regain some momentum in the smartphone market, it can at least take some solace in the revenue it generates from licensing agreements such as this.

"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."

Translation: "You're next Android."

Florian Mueller, a technology patent and intellectual property expert, told me that he believes this deal is bigger than just Nokia and Apple, though. "It strengthens Nokia as it seeks to monetize its patent portfolio more proactively. There are probably many Android device makers with whom Nokia has yet to do a license deal."

This victory demonstrates the strength of Nokia's patent portfolio, and its perseverance in protecting it. Mueller says of Nokia, "It's in a very strong position now vis-à-vis other device makers, none of whom has Apple's resources and the fewest of whom have patent portfolios at a level with Apple's."

And, if Nokia follows in Microsoft's footsteps it will challenge the smartphone and tablet vendors that develop and distribute Android devices--not Google, or the Android OS itself. The strategy has two benefits--it targets companies that are generally smaller than Google and don't have the same financial or legal resources to fight Nokia in court, and it targets the patent infringement at a level where a licensing fee can be monetized on a per-device level for an ongoing revenue stream.

If Microsoft is any example, Nokia could stand to generate more revenue from license agreements with competing platforms than it does from selling its own smartphones.

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