Nokia lawsuit could cost Apple up to $1 billion

updated 01:25 pm EDT, Mon October 26, 2009

Analysts dispute possible payments

A Nokia patent lawsuit could cost Apple as much as $1 billion in back payments, argues Strategy Analytics' Neil Mawston. The analyst tells Reuters that because of the over 34 million iPhones Apple has shipped to date, the company could owe anywhere between $200 million and $1 billion, depending on the terms of a settlement. Pund-IT analyst Charles King suggests that a $400 million figure more likely, assuming a 2 percent royalty scheme.

Such a demand could be comparatively lenient on the part of Nokia, which is said to have been pressuring Apple for months to pay royalties on patents covering wireless data, speech and encryption. The Finnish company claims to have invested over €40 billion in Such a demand could be comparatively lenient on the part of Nokia, which is said to have been pressuring Apple for months to pay royalties on patents covering wireless data, speech and encryption. The Finnish company claims to have invested over €40 billion in research and development over the years, an effort resulting in over 10,000 patent families. "It is almost inconceivable that someone can produce a mobile phone without using Nokia patented technologies," comments CCS Insight research director Ben Wood.

Some form of Nokia victory in the lawsuit may be essential, as the company's smartphone marketshare dropped from 41 to 35 percent in the most recent quarter, mainly giving up ground to Apple and RIM. As a whole the company posted a $1.36 billion loss during the period, which could be alleviated with a new royalty source. Nokia nevertheless remains the world's dominant cellphone maker.