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Nokia to pay Qualcomm €1.7bn in royalties


Published: 17 October, 2008

READ MORE: Nokia | Qualcomm

One fact that was hidden away in Nokia's third quarter results was one that has also been the focus on heated speculation since the handset giant made its peace with Qualcomm in July. This is the price of that truce, and it is now clear that Nokia will pay its former antagonist a total of €1.7bn ($2.3bn) for rights to use the chipmaker's patents.

The agreement granted Nokia a license for all Qualcomm's patents for use in Nokia's mobile devices and Nokia Siemens Networks infrastructure equipment - and ended a long running series of disputes and legal actions that had threatened to slow down the handset industry. The fee is payable during the fourth quarter of this year.

"As a result of the agreement with Qualcomm and certain other license agreements concluded during the third quarter 2008, Nokia incurred a slightly positive impact to its gross margin during the quarter, as the royalty provisions earlier recorded well covered the related obligations," Nokia said in its results statement.

The fee was in line with expectations, and considerably less than the sums Nokia had shelled out to Qualcomm for CDMA-related IPR before its initial agreement expired in April 2007. The Nokia settlement is expected to set an important precedent for Qualcomm's negotiations of other agreements with handset vendors as older deals expire.


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