Nokia and Apple have settled a long-running patent dispute, with the US company agreeing to make a one-off payment and continuing royalties to the struggling Finnish phone maker.
But the end of the row could now mean that phones using Google's Android software will come under fire from Nokia over the same set of patents it has just licensed, suggests one observer.
Nokia said that the payment will have a "positive financial impact" on its second-quarter financial results, where it warned at the end of May that it may only hit break-even in its mobile division. That suggests the amount runs to many millions of dollars. Terms of the deal remain confidential.
Nokia had taken the dispute, which began in October 2009, to the International Trade Commission and attempted to ban the import of Apple iPhones into the US on the basis of patent infringement. Apple made a counterclaim. Both sides asserted a large number of patents in the case.
Under the agreement, both sides are withdrawing all their complaints to the ITC.
Commenting on the result, Florian Mueller, who has followed the row between the two and detailed the elements of the dispute, observed: "This is also very significant with a view to Android. Given that Android is in many ways a rip-off of Apple's operating software, Android-based devices are highly likely to infringe on largely the same Nokia patents that Apple now felt forced to pay for.
"The deal structure is very telling: a combination of a payment for past infringement as well as running royalties is a clear indication that there's serious money in this for Nokia."
Mueller thinks the outcome is positive for Apple: "This is a sweet defeat for Apple because its competitors – especially those building Android-based devices – will also have to pay Nokia, and most if not all of them will likely have to pay more on a per-unit basis because they don't bring as much intellectual property to the table as Apple definitely did.
"So from a competitive point of view, I don't think Apple loses much. On the bottom line its profitability may even benefit from this because Apple's margins face no greater threat than Android-style commoditisation of smartphone technologies."
In a statement, Stephen Elop, president and chief executive officer of Nokia, said: "We are very pleased to have Apple join the growing number of Nokia licensees. This settlement demonstrates Nokia's industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market."
