Nokia and Apple will not have their day in court as they have settled a legal battle over how much Apple pays to use technology developed by Nokia.
Point of view
(The agreement) moves our relationship with Apple from being adversaries in court to business partnersNokia's Chief Legal Officer
The swift settlement surprised investors who had expected the dispute to be ugly and lengthy.
After a previous agreement ended last year Apple complained of being overcharged while Nokia said Apple was violating its patents.
Nokia was once the world’s dominant mobile phone maker but these days most of its profits come from exchange equipment; however it does make digital health monitoring devices – such as smartwatches – which Apple will now resume selling at its stores and online.
Nokia said it would also provide network products and services to Apple under the new business agreement.
Nokia’s Chief Legal Officer Maria Varsellona said the agreement “moves our relationship with Apple from being adversaries in court to business partners”.
In reaction Nokia’s shares rose as much as eight percent at one point on Tuesday.
Why did they settle?
OP Equities analyst Hannu Rauhala said Apple might have been willing to settle with Nokia as the UAS company’s patent battle with chipmaker Qualcomm has escalated.
Inderes analyst Mikael Rautanen said Nokia’s aim to expand its sales of network equipment sales beyond telecom operators to global internet and technology giants may also have played a part in the resolution of the dispute.
What are the patents involved?
Nokia’s patents cover technology that reduces the need for hardware components in a phone, conserves battery life, increases radio reception, helps in recovering lost phones and enables voice recognition, among other features.
Nokia sold its handset business to Microsoft in 2014 to focus on its network business and large portfolio of mobile device patents.