Kai Korschelt an analyst at Deutsche Bank has estimated that Apple paid Nokia some 420 million euros, or $608 million up front as a part of the previously reported patent settlement. Apple will then be paying 95 million euros ($137.6 million) a quarter, based on current sales, for licensing of Nokia patents.
Korschelt didn’t pull these numbers out of thin air. He based his results on similar industry suits, noting that a 1% royalty is typically paid out when all is said and done. That’s a large chunk of money for anyone.
That leads to the next point. The New York Times reports that this is a cross-licensing settlement. That means, in effect, Apple set the market price for Nokia patent, the same patents that Nokia could slam smaller handset makers for infringing on. So, just picking an example, HTC will have to license patents from Nokia, and if the estimate is correct, pay around 1% for every unit made.
In other words, Apple has the money to pay, and has set up a political environment wherein smaller manufacturers may be forced to pay up as well, and they don’t have near the capital Apple does to sling around.
Why do I have a feeling Nokia is quickly going to become nothing more than a patents holding company, who will milk licensing fees from other, more successful companies?
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