Nokia has revealed during its Earnings Call that the patent and business collaboration deal with Apple has provided it with many reasons to be pleased. Not only Apple made an upfront cash payment of €1.7 billion for settling this patent litigation with Nokia, there will ongoing payments made along with uplift to be seen in other businesses too.
This is how Nokia described benefits from Apple deal in detail during its Q2 2017 Earnings call.
Related to only the Apple litigation, we had expected to spend at a run rate of approximately €100 million annually, given the agreement, we should not see any Apple-related litigation costs in Q3, and going forward.
Second, we got a substantial upfront cash payment of €1.7 billion from Apple, strengthening further our cash position. As said earlier, our plans is to provide more details on the intended use of cash in conjunction with our Q3 earnings.
Third, instead of a simple patent licensing agreement, we have agreed on a more extensive business collaboration with Apple, providing potential for a meaningful uplift in our IP Routing, Optical Networks and Digital Health business units over time. Hence, the value of the agreement will be reflected partly as patent licensing net sales in Nokia Technologies, and partly as net sales in other Nokia business groups.
This once again proves the worth of Nokia’s intellectual property. Apple has been one of the longest existing licensees of Nokia. Nokia and Apple announced a business collaboration and licensing agreement two months ago that saw Nokia getting up-front cash payment and will also get additional licensing revenue during the term of the agreement. Apple also resumed sales of Nokia (Withings) Digital Health Products in its retail and online stores.