During the financial webcast with investors and analysts for Q4’16, Nokia’s CFO Kristian Pullola said that the Apple patent battle will cost about €100 million annually. Apple was Nokia’s biggest patent licensee with approximate annual payments of €150 million, at least in 2016. Pullola noted that the revenue target for Nokia Technologies (patent department) in 2017 is €800 million, while for the 2016 it was €950 million.
So we can assume that the €100 million litigation costs are legal fees for lawyers, expert witnesses and similar. These are truly big numbers, and will affect Nokia’s financials, but Rajeev Suri said, during the webcast, that he is confident that Nokia is ready for a long battle, with a positive outcome.
Update: Looking again at this morning’s financial report, it could be that CFO Pullola meant that €100 million cost of Apple battle is in fact the missing Apple payment for patent license, and not the legal fees. The report says: ” The sequential decrease in Nokia Technologies net sales in the fourth quarter 2016 was primarily related to the absence of approximately EUR 100 million of non-recurring net sales related to an expanded IPR license agreement and, to a lesser extent, lower licensing income from certain existing licensees that experienced decreases in handset sales.”
Update 2: After reading again the report clearly states that Q4’16 results were affected by the absence of IPR licence payment, so €100 million yearly could not be related to an absence of royalties, but rather to the litigation expense.
Update 3: Official statement
We would have preferred to reach a fair outcome in the most expedient way possible without litigation; however, we are prepared for a long process if that is necessary, a process during which our additional litigation costs could be approximately EUR100 million per year. – CFO Kristian Pullola