Nokia discloses Apple paid it $2 billion cash to settle patent dispute

Apple during last quarter made a one-time upfront payment of €1.7 billion to Nokia, or approximately $2 billion, to settle all litigation regarding patent disputes between the two companies, the Finnish firm has disclosed in today’s financial results.

According to Nokia’s earnings release, the firm has increased its cash inflow thanks to an upfront cash payment from Apple which was recognized in the second quarter 2017 results:

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.

We also closed a licensing deal with Xiaomi, a milestone win with a Chinese smartphone vendor, setting the stage for us to engage further with other vendors in the country.

Two months ago, Apple and Nokia signed a multi-year cross-license patent agreement which put an end to all litigation between them.

“We are pleased with this resolution of our dispute and we look forward to expanding our business relationship with Nokia,” Jeff Williams, Apple’s Chief Operating Officer, was quoted as saying when the agreement between the two firms was announced.

At the time, the terms of the agreement were not revealed beyond Nokia saying it would receive an upfront cash payment from Apple and additional revenues during the term of the deal.

During today’s earrings call with analysts and investors, Nokia executives characterized the deal with Apple as a more extensive business collaboration:

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.

Nokia will also provide “certain network infrastructure products and services” to Apple.

As a result of the deal, Apple’s online stores around the world have resumed sales of Nokia’s Withings-branded health accessories that were previously pulled from them.