Apple to pay Nokia to settle intellectual property dispute

Apple has agreed to pay Nokia for intellectual property used in its iPhone, ending a long-running dispute between the two mobile phone handset makers.

Analysts said royalty payments of 1pc or 2pc of the retail price of each iPhone could equate to Apple paying Nokia more than $160m a quarter. Photo: EPA

Nokia said that Apple will make a one-off payment to the embattled Finnish handset maker, followed by ongoing royalty payments which Nokia said would have a positive impact on its second-quarter results.

Neither party would disclose the sums involved but analysts said royalty payments of one or two per cent of the retail price of each handset could equate to Apple paying Nokia more than $160m (£97.5m) a quarter.

Nokia said the agreement with Apple would end all patent litigation between the two companies and that they would both withdraw their respective complaints to the US International Trade Commission over breached technology patents.

The deal comes as a boon to Nokia, which has seen a steady loss of market share to iPhone and Android devices, and had warned last month that its second-quarter sales and operating margins would be "substantially below" previous guidance.

Stephen Elop, Nokia chief executive and president, welcomed Apple as a Nokia licensee. "This settlement demonstrates Nokia's industry-leading patent portfolio and enables us to focus on further licensing opportunities," he said.