Apple expected to countersue in Nokia brouhaha
Posted by Dennis Sellers 
Nov 6, 2009 at 12:36pm
Apple is expected countersue in the legal battle with Nokia, reports Reuters. Last month Nokia filed a complaint against Apple with the Federal District Court in Delaware, alleging that Apple’s iPhone infringes Nokia patents for GSM, UMTS and wireless LAN (WLAN) standards.
Basically, Nokia claims that Apple isn’t paying licensing fees for the wireless technologies it uses in the iPhone, iPhone 3G and iPhone 3GS. Apple is likely to disagree.
“I would not be surprised to see a counter-claim from Apple citing patents it owns that it believes Nokia is infringing,” Ben Wood, research director at CCS Insight, told Reuters. “This type of tit-for-tat approach has occured in previous patent battles as each player tries to improve its negotiating position.”
One analyst says it could cost Apple up to US$1 billion (though I personally predict that ain’t gonna happen). Neil Mawston at Strategy Analytics told Reuters that Apple could have to pay Nokia anything between $200 million and $1 billion for patents used in 34 million iPhones shipped so far. In the last quarter alone Apple sold 7.4 million iPhones for an average sales price of $566, according to Strategy Analytics.
And Ben Wood, research director at CCS Insight, told Reuters that “it is almost inconceivable that someone can produce a mobile phone without using Nokia patented technologies.”
The analysts said top vendors who have been in the industry for a long time usually pay a few percent of their revenue as royalties, but new entrants pay around 15 percent of the sales price of 3G phones to patent holders. For older 2G technology the rate is clearly lower.
However, Charles King, an analyst with Pund-IT, told eWeek that the estimate The New York Times worked out seems more reasonable, in which Nokia would receive a 2 percent royalty, or approximately $12, for each iPhone Apple has sold. Based on sales of 34 million handsets, compensation could be over $400 million—and that’s before any possible penalties.
“According to Nokia, they’ve been telling Apple for months now that they owe them money for the patents they’re using, and Apple has refused to pay them anything,” King added. “From Nokia’s point of view, they’ve tried the carrot and to be nice guys, and now it’s time to bring out the stick.”
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Dennis Sellers
Dennis has been a newspaper editor/reporter (seven years) and teacher (seven years). He has over 10,000 magazine, newspaper and online articles to his credit. He has also covered the Mac and tech industries for over a decade for such online publications as MacCentral, MacMinute and now MacsimumNews.
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