Apple and Nokia settle iPhone dispute

Apple has agreed to pay Nokia for intellectual property used in its iPhone, settling a long-running legal battle between the rival handset makers. The US company will pay a one-off sum to Nokia followed by ongoing royalty payments for patents owned by the Finnish mobile phone maker.

The deal marked a rare piece of good news for Nokia after a torrid period of declining market share and strategic upheaval. Nokia said the agreement would result in the settlement of all patent litigation between the two companies and the withdrawal of their respective complaints to the US International Trade Commission. No further details of the deal were given, but Richard Windsor, a technology specialist at Nomura, estimated that royalty payments to Nokia could amount to 1-2 per cent of the $600 average price of the iPhone. With 18m of the devices selling each quarter, this could result in quarterly payments of $162 million to Nokia.