Nokia confirmed receiving an upfront cash payment of approximately 1.7 billion Euros from Apple in its second quarter earnings. The company has also signed a similar patent deal with Xiaomi.
Nokia received €1.7 billion or $2 billion in settlement for patent dispute from Apple. In its recent quarter result, the Finnish company confirmed receiving an upfront cash payment of approximately 1.7 billion Euros from the Cupertino-based iPhone maker. It added that part of the payment has been recognised in the second quarter of 2017 leading to increased cash flow.
Nokia and Apple decided to settle their patent dispute in May and signed a multi-year patent license deal. The two companies also announced a business collaboration with Nokia providing Apple with network infrastructure for its products and services. The announcement came after Nokia sued Apple for violation of technology patents and Apple countersuing the company for overcharging for patent use. After the dispute, Apple decided to discontinue sales of digital health products from Nokia-owned Withings from its online and retail stores.
As part of the agreement, Apple will continue to pay royalties for patent use along with this up-front cash payment. Nokia will share more details on intended use of additional cash inflow during the announcement of its third quarter earnings in October, reports SeekingAlpha.
"In the fourth pillar of our strategy, creating new business and licensing opportunities in the consumer ecosystem, the licensing and business partnership agreement that we reached with Apple in the quarter was a clear highlight. You could see the benefit of that agreement in Nokia Technologies' results, and we look forward to continuing to expand our overall business with Apple in the coming months," Rajeev Suri, President and CEO, Nokia said in a released statement.
Nokia has scored a big win with the Apple patent license deal and it plans to add more manufacturers to the list. The company recently signed a similar patent licensing agreement with Xiaomi, China's fourth largest smartphone maker. Suri added that the Xiaomi deal will help it negotiate a further agreement with other Chinese smartphone vendors.