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Timing of Nokia agreement suggests a 'favorable outcome' for Apple

post #1 of 42
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Though Apple will pay Nokia a one-time sum and ongoing royalties as a result of their new settlement, one analyst believes the timing of the agreement suggests Apple was able to negotiate a favorable outcome.

Analyst Maynard Um with UBS Investment Research believes Apple may have been in a favorable position in negotiations with Nokia because of a ruling in the iPhone maker's favor made by the U.S. International Trade Commission in March. That early victory may have allowed Apple to reach a better royalty agreement with Nokia than the Cupertino, Calif., company had expected.

In March, the ITC ruled that Apple did not infringe on five patents owned by Nokia. It was a preliminary ruling in a sprawling legal conflict between the two companies, with both accusing the other of multiple patent violations.

But in April, the ITC staff also voiced its support for Nokia, causing a setback for Apple. Officials at the commission recommended that Nokia not be found liable of infringing on Apple's patents.

That legal battle came to an end this week, as Nokia announced it has entered into an agreement with Apple and both companies have withdrawn their complaints from the ITC. Through the deal, Nokia will receive a one-time payment from Apple, as well as ongoing royalty payments.

Um said in a note to investors on Tuesday that both Nokia and Apple are likely to remain tight-lipped over the sums involved in their agreement, as is standard with industry cross-licensing. But he believes Apple's one-time payment to Nokia probably amounts to several hundred million dollars.



Based on the presumption that Apple was accruing liability funds related to its dispute with Nokia, Um said the outcome could be even more favorable for the iPhone maker. For example, Apple may have been "over-accruing" for a higher potential cost of a licensing deal with Nokia, and a settlement will also reduce legal expenses by avoiding a courtroom showdown that was expected to last for years.

UBS Investment Research sees a benefit to Apple of about 6 cents in earnings per share for each quarter as a result of the settlement. The firm has maintained its "buy" rating for AAPL stock, and reiterated a 12-month price target of $510.
post #2 of 42
Two of the five were back in play as Nokia had appealed the decision - but three were definitely right out. With a settlement at this stage the reason for the three being excluded may never become public - which might very well benefit Nokia with other licensees.
post #3 of 42
Quote:
Originally Posted by cloudgazer View Post

Two of the five were back in play as Nokia had appealed the decision - but three were definitely right out. With a settlement at this stage the reason for the three being excluded may never become public - which might very well benefit Nokia with other licensees.

Apple's response doesn't sound like they feel they've "won":

Apple and Nokia have agreed to drop all of our current lawsuits and enter into a license covering some of each others patents, but not the majority of the innovations that make the iPhone unique, the company said. Were glad to put this behind us and get back to focusing on our respective businesses.

http://allthingsd.com/20110613/break...e-patent-spat/
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post #4 of 42
Quote:
Originally Posted by Gatorguy View Post

Apple's response doesn't sound like they feel they've "won":

Apple and Nokia have agreed to drop all of our current lawsuits and enter into a license covering some of each others patents, but not the majority of the innovations that make the iPhone unique, the company said. Were glad to put this behind us and get back to focusing on our respective businesses.

http://allthingsd.com/20110613/break...e-patent-spat/

What about that tells you anything. Very dry non-reaction. Pretty typical of Apple in legal cases.
post #5 of 42
Apple paid Nokia several hundred million dollars? Some Nokia executive just made his bonus for the quarter, and sold the company down the river in the process. With the patent arrow removed from their quiver, Nokia is now officially disarmed.

Good job!

This is what happens when a company is run by someone who's just in it for the paycheck.
post #6 of 42
Quote:
Originally Posted by Gatorguy View Post

Apple's response doesn't sound like they feel they've "won":

Apple and Nokia have agreed to drop all of our current lawsuits and enter into a license covering some of each others patents, but not the majority of the innovations that make the iPhone unique, the company said. Were glad to put this behind us and get back to focusing on our respective businesses.

http://allthingsd.com/20110613/break...e-patent-spat/

Sounds even better for Apple, they've cross licensed a lot of stuff, including everything they need from Nokia, but they haven't licensed everything they have ("the majority of the innovations that make the iPhone unique") to Nokia.
post #7 of 42
Quote:
Originally Posted by Wovel View Post

What about that tells you anything. Very dry non-reaction. Pretty typical of Apple in legal cases.

Pretty typical of any legal case, to be honest.

I have a theory that this might suggest a prelude to a purchase by MS. Apple has cross licencing agreements with MS, so if Nokia had been bought by MS, they would have got no royalties from Apple.

Its possible that Nokia decided to reduce their royalty charges to a level Apple was comfortable with, in order to get something, before they merge with MS.
post #8 of 42
Quote:
Originally Posted by addicted44 View Post

Pretty typical of any legal case, to be honest.

I have a theory that this might suggest a prelude to a purchase by MS. Apple has cross licencing agreements with MS, so if Nokia had been bought by MS, they would have got no royalties from Apple.

Its possible that Nokia decided to reduce their royalty charges to a level Apple was comfortable with, in order to get something, before they merge with MS.

cool insight
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post #9 of 42
Probably enough in the settlement to keep Nokia on life support for a few extra days.
It'll allow the company's value to slide more until MS buys them in a fire sale.
post #10 of 42
Quote:
Originally Posted by Hattig View Post

Sounds even better for Apple, they've cross licensed a lot of stuff, including everything they need from Nokia, but they haven't licensed everything they have ("the majority of the innovations that make the iPhone unique") to Nokia.

When this all started, Apple indicated it was willing to pay RAND rates for the technologies that Nokia was to license, but that Nokia wanted a higher rate than they were getting from other licensees and that Nokia was demanding a full cross-license for Apple's iPhone centric patent portfolio.

Apple explicitly stated that the settlement didn't include the stuff that made the iPhone distinct, the one-time payment was probably to settle the back terms that Apple had so far not paid and then the rest is probably similar to the RAND terms that they had agreed to pay all along. We won't know exactly because the terms before and after won't be available for inspection, but I suspect that Nokia got at best a Pyrrhic victory. Since the settlement terms could have been worse than the original RAND terms, Nokia could have outright lost even though recording their "victory" in court. The final answer is as Sunspot42 says:

Quote:
Originally Posted by sunspot42 View Post

Christmas in June!
Apple paid Nokia several hundred million dollars? Some Nokia executive just made his bonus for the quarter, and sold the company down the river in the process. With the patent arrow removed from their quiver, Nokia is now officially disarmed.

Good job!

This is what happens when a company is run by someone who's just in it for the paycheck.
post #11 of 42
Quote:
Originally Posted by addicted44 View Post

Pretty typical of any legal case, to be honest.

I have a theory that this might suggest a prelude to a purchase by MS. Apple has cross licencing agreements with MS, so if Nokia had been bought by MS, they would have got no royalties from Apple.

Its possible that Nokia decided to reduce their royalty charges to a level Apple was comfortable with, in order to get something, before they merge with MS.

Actually... this is a prelude to Apple purchasing Nokia... with Nokia being the first company to licence iOS. This settlement helps Nokia stay afloat (and therefore keeps the valuation higher) until the papers are signed.
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post #12 of 42
Quote:
Originally Posted by addicted44 View Post

Its possible that Nokia decided to reduce their royalty charges to a level Apple was comfortable with, in order to get something, before they merge with MS.

At the price at which they are currently trading, it will probably be an outright cash acquisition, rather than a 'merger'.....
post #13 of 42
In my early reading about the case, it seemed like the underlying issue was not whether Apple would pay licensing fees for these patents or not but rather, at what cost. Nokia was likely trying to gouge them in order to inflict revenge through onerous terms. Most news accounts spin it as Apple trying to get out of paying anything at all, but don't believe it. This was just a hardball negotiation tactic.

Probably not a coincidence that with Elop in charge, that Nokia has become more reasonable in order to get it behind them, benefit by a bit more cash flow now and cut the cost of the legal battle. All that will only help them get focused, it they are up to it.

I suspect that Apple is pleased with the outcome ...
post #14 of 42
Quote:
Originally Posted by Hattig View Post

Sounds even better for Apple, they've cross licensed a lot of stuff, including everything they need from Nokia, but they haven't licensed everything they have ("the majority of the innovations that make the iPhone unique") to Nokia.

and that is what?

touch screen phones are everywhere these days
post #15 of 42
All lawsuits cost money. Both companies decided that the cost to litigate was more than the cost to settle so they settled. Nokia gets royalty payments for something and Apple gets access to something they were probably already using.

It's almost the same as the HP/Palm vs. Apple debacle from a couple of years back. Both sides decided it wasn't worth it so they lets things be. In that particular case they didn't even bother using lawyers.

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post #16 of 42
Quote:
Originally Posted by island hermit View Post

Actually... this is a prelude to Apple purchasing Nokia... with Nokia being the first company to licence iOS. This settlement helps Nokia stay afloat (and therefore keeps the valuation higher) until the papers are signed.

you say in jest, but I wonder if they played that card....
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post #17 of 42
Quote:
Originally Posted by sunspot42 View Post

Apple paid Nokia several hundred million dollars? Some Nokia executive just made his bonus for the quarter, and sold the company down the river in the process. With the patent arrow removed from their quiver, Nokia is now officially disarmed.

Good job!

This is what happens when a company is run by someone who's just in it for the paycheck.

Not really, this my help Nokia since they are suing everyone in the industry, other companies will fall right behind the Apple decision. Apple has more money than any of the competitors and if apple settle than the competitors will have to settle since they can not afford to fight. They most likely will not get the best deal on licensing since the first one who comes to the table usually gets the better deal and everyone else is punished for waiting.

I think Nokia rather compete with Apple than all the Android Me Too guys since they are more likely eat Nokia lunch. Apple is not going after Nokia core business but the other guys are so if Nokia can possible hand tie them on licensing agreement it put them in a better position. This is far more complicated than you realize.
post #18 of 42
Quote:
Originally Posted by Hattig
Sounds even better for Apple, they've cross licensed a lot of stuff, including everything they need from Nokia, but they haven't licensed everything they have ("the majority of the innovations that make the iPhone unique") to Nokia.

Quote:
Originally Posted by al_bundy View Post

and that is what?

touch screen phones are everywhere these days

In the original iPhone keynote Jobs pointedly said Apple had over 200 patents on the technologies that made the iPhone unique and that the company was prepared to defend them "vigorously" (I believe that was the word).

Touch screens as such had already been in existence for some time and though something about Apple's variant might have represented one or more of the patents, being a touch screen device per se was certainly not one.

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post #19 of 42
Quote:
Originally Posted by Hattig View Post

Sounds even better for Apple, they've cross licensed a lot of stuff, including everything they need from Nokia, but they haven't licensed everything they have ("the majority of the innovations that make the iPhone unique") to Nokia.

Like what? Grid of icons?

Nokia got all the need patents they need for their upcoming devices in WP7. I wonder when Apple will start paying for that camera roll in the viewfinder that MSFT patented big time...


"There is, however, one feature in iOS 5 which is exactly, and I mean exactly, like a feature on Windows Phone 7: Camera Swipe to Camera Roll."
http://appft1.uspto.gov/netacgi/nph-...DN/20110119619
post #20 of 42
Quote:
Originally Posted by martimus3060 View Post

I suspect that Nokia got at best a Pyrrhic victory

Maybe not. Nokia knows that the real money is in going after HTC, Samsung, etc., who have literally no IP to fight back with.

Pull off a MSFT, and make more money off Android sales than Google does themselves.
post #21 of 42
Quote:
Originally Posted by sunspot42 View Post

Apple paid Nokia several hundred million dollars? Some Nokia executive just made his bonus for the quarter, and sold the company down the river in the process. With the patent arrow removed from their quiver, Nokia is now officially disarmed.

Good job!

This is what happens when a company is run by someone who's just in it for the paycheck.

My bet is Nokia made about 1 billion dollars and a continued stream of 100+ million each quater.

You are right that this takes 1 patent quiver out of play.
post #22 of 42
Quote:
Originally Posted by martimus3060 View Post

When this all started, Apple indicated it was willing to pay RAND rates for the technologies that Nokia was to license, but that Nokia wanted a higher rate than they were getting from other licensees and that Nokia was demanding a full cross-license for Apple's iPhone centric patent portfolio.

Apple explicitly stated that the settlement didn't include the stuff that made the iPhone distinct, the one-time payment was probably to settle the back terms that Apple had so far not paid and then the rest is probably similar to the RAND terms that they had agreed to pay all along. We won't know exactly because the terms before and after won't be available for inspection, but I suspect that Nokia got at best a Pyrrhic victory. Since the settlement terms could have been worse than the original RAND terms, Nokia could have outright lost even though recording their "victory" in court.

totally correct. but as usual, the media and blogs completely ignore these actual facts of the matter and are reporting a Nokia victory in court. we are in an era of determined media stupidity pretending to be journalism.
post #23 of 42
Quote:
Originally Posted by al_bundy View Post

and that is what?

touch screen phones are everywhere these days

Yeah, but there's a whole lot of tiny bits of 'ideas' and 'technologies' involved that can be patented on their own right. Ask TrollSys
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post #24 of 42
Quote:
Originally Posted by battiato1981 View Post

In my early reading about the case, it seemed like the underlying issue was not whether Apple would pay licensing fees for these patents or not but rather, at what cost. Nokia was likely trying to gouge them in order to inflict revenge through onerous terms. Most news accounts spin it as Apple trying to get out of paying anything at all, but don't believe it. This was just a hardball negotiation tactic.

Probably not a coincidence that with Elop in charge, that Nokia has become more reasonable in order to get it behind them, benefit by a bit more cash flow now and cut the cost of the legal battle. All that will only help them get focused, it they are up to it.

I suspect that Apple is pleased with the outcome ...

you got it right.

i dunno if all the other OEM's already pay Nokia the standard fee for this necessary license. if not, they will now. and Nokia needs all the cash flow they can get these days.
post #25 of 42
Quote:
Originally Posted by Ricardo Dawkins View Post

Like what? Grid of icons?

Nokia got all the need patents they need for their upcoming devices in WP7. I wonder when Apple will start paying for that camera roll in the viewfinder that MSFT patented big time...


"There is, however, one feature in iOS 5 which is exactly, and I mean exactly, like a feature on Windows Phone 7: Camera Swipe to Camera Roll."
http://appft1.uspto.gov/netacgi/nph-...DN/20110119619

Two words: Recycle Bin.
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post #26 of 42
Quote:
Originally Posted by bigpics View Post

In the original iPhone keynote Jobs pointedly said Apple had over 200 patents on the technologies that made the iPhone unique and that the company was prepared to defend them "vigorously" (I believe that was the word).


Steve said something like:

Quote:
...and boy have we patented it!
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post #27 of 42
Quote:
Originally Posted by ranReloaded View Post

Two words: Recycle Bin.

Two words: Xerox Alto
post #28 of 42
Quote:
Originally Posted by island hermit

Actually... this is a prelude to Apple purchasing Nokia... with Nokia being the first company to licence iOS. This settlement helps Nokia stay afloat (and therefore keeps the valuation higher) until the papers are signed.

Quote:
Originally Posted by boeyc15 View Post

you say in jest, but I wonder if they played that card....

Not sure Apple would be allowed to acquire Nokia, on anti-trust grounds. But maybe Apple isn't perceived as a big enough player in the phone business yet?

Everyone says Android is the fastest growing platform, but the elephant in the room is what's really going on: Android is preying on the carcasses of failing platforms (like Windoze phones). It represents, largely, a consolidation of non-Apple phone OSes.

In contrast, iPhone is the real growth story. Android is riding Apple's coattails to be sure, in addition to consolidating the competition, but it is the iPhone which sparked the growth in smart phones by actually making them, well, smart and desirable.
post #29 of 42
Quote:
Originally Posted by Ricardo Dawkins View Post

Two words: Xerox Alto

One word: Tosser!
post #30 of 42
Quote:
Originally Posted by Ricardo Dawkins View Post

Two words: Xerox Alto

Why do idiots bring up Xerox?

Fact:
Apple obtained permission ahead of the Xerox PARC visit. Apple provided compensation in exchange for the various Xerox PARC ideas such as the GUI.
post #31 of 42
Quote:
Originally Posted by addicted44 View Post

I have a theory that this might suggest a prelude to a purchase by MS. Apple has cross licencing agreements with MS, so if Nokia had been bought by MS, they would have got no royalties from Apple.

One way or another, it looks like M$ is poised to control Nokia. What with a M$ Borg drone running Nokia now, and M$ pumping money into Nokia in an a last ditch effort to save M$'s failing Windoze mobile platform. A take-over by M$ certainly seems portended indeed.

M$ seems to have the Midas touch these days, with the exception that everything they touch turns to lead, not gold.

So i'm quite relieved that Nokian Tyres and Nokian Footwear are no longer part of Nokia Corporation. At least they have a bright future!
post #32 of 42
Quote:
Originally Posted by GotWake View Post

Why do idiots bring up Xerox?

Fact:
Apple obtained permission ahead of the Xerox PARC visit. Apple provided compensation in exchange for the various Xerox PARC ideas such as the GUI.

He's not an idiot, he's a troll. He doesn't care what's true, he cares about pushing buttons. Put it on your ignore list and it will leave us be.
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post #33 of 42
Quote:
Originally Posted by _Hawkeye_ View Post

One way or another, it looks like M$ is poised to control Nokia. What with a M$ Borg drone running Nokia now, and M$ pumping money into Nokia in an a last ditch effort to save M$'s failing Windoze mobile platform. A take-over by M$ certainly seems portended indeed.

"We are the borg. Lower your firewall and surrender your PC. Computing as you know it has come to and end. We will add your psichological and technological distinctiveness to our... I mean, we will EE&E the shit out of it."

Quote:
Originally Posted by _Hawkeye_ View Post

M$ seems to have the Midas touch these days, with the exception that everything they touch turns to lead, not gold.

So i'm quite relieved that Nokian Tyres and Nokian Footwear are no longer part of Nokia Corporation. At least they have a bright future!

The sadiM touch!
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post #34 of 42
Quote:
Originally Posted by Ricardo Dawkins View Post

Two words: Xerox Alto

Four words:"They paid for it."

When you pay for the ideas it's not stealing

How I wish ignorant people would learn about the history they try to pontificate on
post #35 of 42
Quote:
Originally Posted by martimus3060 View Post

The final answer is as Sunspot42 says:

Exactly. If Nokia had anything significant they wouldn't have settled this quickly. Those who are interpreting settlement as "loosing" are being very myopic.
post #36 of 42
Quote:
Originally Posted by martimus3060 View Post

When this all started, Apple indicated it was willing to pay RAND rates for the technologies that Nokia was to license, but that Nokia wanted a higher rate than they were getting from other licensees and that Nokia was demanding a full cross-license for Apple's iPhone centric patent portfolio.

Apple explicitly stated that the settlement didn't include the stuff that made the iPhone distinct, the one-time payment was probably to settle the back terms that Apple had so far not paid and then the rest is probably similar to the RAND terms that they had agreed to pay all along. We won't know exactly because the terms before and after won't be available for inspection, but I suspect that Nokia got at best a Pyrrhic victory. Since the settlement terms could have been worse than the original RAND terms, Nokia could have outright lost even though recording their "victory" in court. The final answer is as Sunspot42 says:

This is my interpretation as well. Apple probably settled for FRAND rates, and paid the back fees that they were withholding during the litigation.

I bet that Nokia's next financials will show how large these payments are, since their operational earnings will be close to nil.
post #37 of 42
Wall Street was so impressed by Nokia's victory [dig, dig] that they awarded the stock by increasing it's present price a grand total of 15 pennies.

The Apple stock was punished by increasing is present price by a grand total of 584 pennies.

So, Apple valuation jumped $5.84/share to $.15/share for Nokia.

And that's even after Johnson's announcement to head JC Penney's.

It's clear that Wall Street is finally catching up to what serious investors of Apple know--Apple is reaching a point where the vision and execution, on all fronts, is so ingrained at all levels that losing a visible face that once would scare Wall Street now emotes a yawn.

Apple will replace Johnson with an up and coming person the entire Industry will have been found to fight over as they do with the rest of their executives.

Having moved Tim Cook into running Apple now for several quarters the fear of Jobs taking down Apple have also been worked into the current price.

Apple's long term visions are in place, no matter who steps in to pitch in and help.
post #38 of 42
Quote:
Originally Posted by GotWake View Post

Why do idiots bring up Xerox?

Fact:
Apple obtained permission ahead of the Xerox PARC visit. Apple provided compensation in exchange for the various Xerox PARC ideas such as the GUI.

It's all about revising history to suit one's own bias and it happens on both sides. However in the case of Apple the haters are particularly offensive in their revisionist statements. You still run into the occasional troll who claims Microsoft owns Apple becasue of the non-voting stock they long ago got rid of and made a tidy profit on. The basic history the haters and trolls would like for people to believe is that Apple invented nothing, innovated nothing, did nothing that wasn't already done, and produces junk to this day. Not bad for a company that is more valuable than Microsoft, Google, and HP.
post #39 of 42
Didn't apple recently buy a bunch of freescale patents?I wonder if that is what brought this to a close.
post #40 of 42
Most of Apple's "unique" patents related to multi-touch as opposed to touch screen technology. Touch screen prior to the iPhone worked by merely pushing a button. They didn't work by swipe, pinch, squeeze, and those types of gestures. Some patents relate to simple things like the swipe unlock screen. People might think that is a pretty simple idea, but before to unlock a screen you generally had to push a button.

Multi-touch wasn't unique to Apple either. Apple, however, bought companies like Finger works that did a lot pioneering work in multi-touch.

Quote:
Originally Posted by bigpics View Post

In the original iPhone keynote Jobs pointedly said Apple had over 200 patents on the technologies that made the iPhone unique and that the company was prepared to defend them "vigorously" (I believe that was the word).

Touch screens as such had already been in existence for some time and though something about Apple's variant might have represented one or more of the patents, being a touch screen device per se was certainly not one.

Thanks for playing the home game. Do feel free to try again tho'.....
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