Why Nokia is suing Apple over iPhone GSM/UMTS/WLAN patents and what’s really at stake

12 Black Fridays of the Season“Nokia has filed suit over patent infringement on Apple’ iPhone, claiming that ‘by refusing to agree appropriate terms for Nokia’s intellectual property, Apple is attempting to get a free ride on the back of Nokia’s innovation.’ Actually the reverse is true,” Daniel Eran Dilger writes for Roughly Drafted.

“As the world’s leader in handset sales by a wide margin, Nokia most certainly does have one of the ‘strongest and broadest patent portfolios in the industry,’ as the company says. And having licensed its technology to nearly every mobile maker in the industry, it’s not surprising that Apple will have to pay Nokia to play in the phone market,” Dilger writes.

“However, Nokia is painting a picture that doesn’t doesn’t really mesh with reality, suggesting that Apple is a rogue manufacturer intent on breaking patent laws,” Dilger writes. “In reality, Apple maintains one of the most experienced legal teams in the field of intellectual property, knows how the industry works, and either pays for IP or proves that it doesn’t need to.”

Full article here.

Ashby Jones blogs for The Wall Street Journal, “It’s a fact of life that litigation is often used as a business tool — a set of flashing lights to get a competitor to sit up and take notice, or a cudgel to bring a more powerful company to the negotiating table. Analysts say such could be the case with Nokia here.

“‘I really think this is more a function of Nokia trying to compete with Apple more than anything even if it’s through the courts,’ said Shaw Wu, an analyst with Kaufman Brothers, adding that Nokia may be taking action now because the iPhone is starting to gain ground in Europe and Asia,” Jones reports. “‘It’s a non-event for Apple. It’s immaterial even if they pay a lump sum,’ he said.”

Jones reports, “Maybe so. But the NYT writes that the potential return to Nokia could be enormous. Typically, the royalties for essential patent portfolios in cellphones make up 1 percent to 2 percent of the wholesale price. The wholesale cost to wireless carriers of the iPhone is estimated to average about $600. A 2 percent royalty would represent $12 for each phone sold. In just the most recent quarter, Apple sold 7.4 million iPhones. It has sold more than 34 million total.”

Full article here.

MacDailyNews Take: Can’t compete? Litigate.

27 Comments

  1. Perhaps the massively innovative Apple corporation should develop it’s own network technology, rather than stealing the one others have innovated and developed.

    That shouldn’t take longer than few minutes and cost maybe a few meal tickets at the Cupertino cafe. Better option than stealing other peoples technology anyway.

  2. I desagree with you. I’m a long-term apple user, but I also find Nokia very competitive. Don’t think apple is the best, and you should not think it. If Nokia does it, probably it is because of the same reason Apple would litigate if someone does the same. On the other hand I want to see more competition between these two, so more innovation comes around. BTW I’m looking forward to see the N900!!

  3. Very simple, Apple will get pissed off at the GSM standard. They’ll jump in, re-invent a new standard, make it cheaper than Nokia, get the other manufacturers involved with the new standard…

    And kapish, nokia’s gone

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