“Time To Pay, Jobs”, says Nokia CEO
In 2009, Apple was the target of a massive lawsuit from Nokia. The Finnish mobile giant accused Apple of “trying to get a free ride on the back of Nokia’s innovation”. There were 10 patent infringements like encryption, speech coding, security and wireless data. Nokia had alleged that they had granted about 40 firms the right to use their technology except Apple.
“The basic principle in the mobile industry is that those companies who contribute in technology development to establish standards create intellectual property, which others then need to compensate for”- Ilkka Rahnasto (VP of legal and intellectual property at Nokia)
Nokia had also said that they had invested around $60 billion in the R&D while Apple reported a surge of $1.67 billion in their profits- thanks to the huge success of the iPhone.
And, after what may seem like eons, Nokia has won the case and is ready to grant Apple the same rights that they have granted to 40 other companies. Before doing this though, Apple has to pay Nokia a one-time royalty and later, oodles and oodles of money for the term of the agreement. Though the time period of the agreement is still unknown, it might give Nokia a little more time to think of their future strategy. This agreement between Apple and Nokia may give Nokia a slight edge in the New York Stock Exchange for the second quarter of 2011. Nokia’s shares have already risen by 3% and trade analysts are expecting a steeper rise.
Even though this may seem like CPR to the dying Finnish brobdingnagian, it won’t help them much since their market share has become almost negligible now. Nokia’s going to need a little more than all these patent settlements and Microsoft’s star power to make a comeback in the market. The Nomura Group in Japan says that this settlement isn’t going to benefit Nokia much in the long run. This extra money is only going to help them make a smoother transition from the clunky Symbian OS to Microsoft’s Windows Mobile OS. After that, Nokia may just have to rely on Microsoft’s bank account for their Research & Development. The Nomura Group also predicted that Nokia may be surpassed by Samsung and Apple in the smartphone market by the end of this year. And since not many people are familiar with the Windows Mobile OS, they may not like it on Nokia’s handsets and might just abandon ship for Google/Apple branded handsets.
But, even though Nokia’s going down in the developed countries, it still has a HUGE market in lesser-developed countries like India, Brazil, China and a few parts of Africa. The cheap handsets and tie-ups with major telecom players give Nokia a huge playground in which they can step up their game.