Apple to pay Nokia to settle intellectual property dispute

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Apple has agreed to pay Nokia for intellectual property used in its iPhone, ending a long-running dispute between the two mobile phone handset makers.Nokia said that Apple will make a one-off payment to the embattled Finnish handset maker, followed by ongoing royalty payments which Nokia said would have a positive impact on its second-quarter results.

Neither party would disclose the sums involved but analysts said royalty payments of one or two per cent of the retail price of each handset could equate to Apple paying Nokia more than $160m (�97.5m) a quarter.

Nokia said the agreement with Apple would end all patent litigation between the two companies and that they would both withdraw their respective complaints to the US International Trade Commission over breached technology patents.

The deal comes as a boon to Nokia, which has seen a steady loss of market share to iPhone and Android devices, and had warned last month that its second-quarter sales and operating margins would be "substantially below" previous guidance.

Stephen Elop, Nokia chief executive and president, welcomed Apple as a Nokia licensee. "This settlement demonstrates Nokia's industry-leading patent portfolio and enables us to focus on further licensing opportunitiesNokia is poised to close six of its online stores worldwide, including those operating in the UK and the US. It follows the closure of its online retail operations in France, Spain, Sweden and the Netherlands.

The timing of the closure has yet to be confirmed but a Nokia spokesman said the company wanted to "simplify its channels and focus its resources on its existing [retail] customers."