updated 03:40 pm EDT, Tue June 14, 2011
Lump sum could be worth $608 million
A Deutsche Bank analyst, Kai Korschelt, has devised a more precise estimate of how much a new patent deal with Nokia may cost Apple. Korschelt's numbers assume a 1 percent royalty on all iPhones sold through the first quarter, which is in excess of 110 million units; they also assume an average selling price of $550. With that considered, Apple's initial lump-sum payment could be worth €420 million, or about $608 million US.
Continuing to pay royalties, Apple could end up spending €95 million on a quarterly basis, equivalent to about $137.6 million. The amount would of course go higher or lower based on sales, and Apple has been on a steady upward trend with the iPhone. Apple may therefore end up paying Nokia over $1 billion by the end of 2011. If sales somehow remained flat in 2012, Apple would still end up paying $550.4 million that year.
In the short term Nokia is expected to use the money to help boost its flagging cellphone business. While the Finnish firm is still a world leader in some areas, it has taken a beating when it comes to smartphones, largely as a result of the iPhone and devices based on Google's Android platform. It is in the middle of transitioning from the Symbian platform to Windows Phone, and may have difficulty regaining ground.