Apple to pay Nokia for every iPhone sold

Nokia did not disclose financial terms of the settlement but said the agreement would have a
"positive financial impact" on Nokia's second-quarter results.

The settlement comes at a time when Nokia needed a boost. Nokia had its debt rating cut to the lowest investment grade from Fitch just last week, has lost its market dominance to Apple and Android-running devices, and is undergoing a painful transition to a new operating system.

The agreement settles all outstanding patent litigation between the two. The companies also agreed to withdraw complaints against each other with the International Trade Commission over the use of intellectual property.

Nokia, has been in the handheld business earlier than Nokia, had claimed that Apple's iPhone smartphone and iPad tablet infringed on its patents. Nokia said its pioneering innovations are being used by Apple to create key features in its products in the areas of multi-tasking operating systems, data synchronization, positioning, call quality and the use of Bluetooth accessories.

"We are very pleased to have Apple join the growing number of Nokia licensees," said Stephen Elop, president and chief executive officer of Nokia, in a June 14 statement. "This settlement demonstrates Nokia's industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market."

"Apple and Nokia have agreed to drop all of our current lawsuits and enter into a license covering some of each other's patents, but not the majority of the innovation that makes the iPhone unique," the Cupertino, Calif.-based Apple said.

Bloomberg News relates Sami Sarkamies, an analyst at Nordea Bank AB in Helsinki, said in a note to clients the initial payment will likely be in the range of hundreds of millions of euros related to about 200 million Apple devices delivered to date.

According to the Financial Post, RBC Capital Markets analyst Mike Abramsky estimates royalty rates of approximately 0.75% to 1.5% per iPhone, iPad and iPod Touch shipped globally. That may equate to a payment between US$800-million and US$1.6-billion in the third quarter.

Transition stage for Nokia

Nokia four years ago sold more mobile phones than all the other handset-makers combined. From a 50% market share, Nokia phones are now only being bought by one out four cellphone users, as smartphones run by Google's Android operating system and Apple's iPhones continue to gain following.

Nokia said several weeks ago that it might not book a profit in its core cellphone business for the second quarter.
Nokia Chief Executive Officer Stephen Elop is readying a line of phones based on Microsoft's Windows Phone 7 operating system to replace the Symbian line. However, Nokia has received an added pressure as the new batch of phones products are only expected to be in place well into 2012, and issues remain whether consumers will embrace the Windows-based devices.

Windows-based smartphones have yet to gain following. Google's Android system, has already grown to become the largest smartphone operating system with 36 percent of units sold in the first quarter, compared to only 27.4% for the Symbian, and 3.6% for Windows-based devices, according research firm Gartner Inc.

In April Nokia announced that it would transfer its Symbian software activities, including about 3,000 employees, to Accenture. In addition, Nokia also said it plans to reduce its global workforce by about 4,000 employees by the end of 2012, with the majority of reductions in Denmark, Finland and the UK.

"Strategy transitions are difficult. We recognize the need to deliver great mobile products, and therefore we must accelerate the pace of our transition," said Nokia's CEO said in April. "Our teams are aligned, and we have increased confidence that we will ship our first Nokia product with Windows Phone in the fourth quarter 2011."

Monetizing from IPR

Nokia for now could focus on monetizing on its arsenal of patents.

Nokia said that during the last two decades, it has invested EUR43 billion in research and development and built one of the wireless industry's strongest and broadest IPR portfolios, with over 10,000 patent families.

Nokia could push harder to secure licensing and royalty income from new entrants in the smartphone market, Rod Hall, an analyst at J.P.Morgan, said in a research note, according to reporting by the Financial Post. "The patent license agreement with Apple highlights the strength and breadth of Nokia's patent portfolio in the wireless communications market," Hall said.

The outcome of the Apple-Nokia dispute could also have major implications for Google's Android operating system and the manufacturers using it because Android and Apple's mobile software are similar, meaning Android may also be using many of the same technologies in question, Florian Muller, an intellectual-property consultant in Starnberg, Germany, told the Wall Street Journal.

Nokia will release its second quarter results on July 21, 2011.

Apple goes to court to protect its App Store ecosystem

"Apple Inc. hereby respectfully moves to intervene as a defendant and counterclaim plaintiff in the above-captioned action brought by plaintiff Lodsys, LLC against seven software application developers for allegedly infringing U.S. Patent Nos. 7,222,078 and 7,620,565. Apple seeks to intervene because it is expressly licensed to provide to the Developers products and services that embody the patents in suit, free from claims of infringement of those patents."
So begins the motion Apple (AAPL) filed Thursday in the same Texas federal court where nine days earlier a company called Lodsys threatened to wreck the fragile software ecosystem that supports nearly 90,000 iOS developers and has produced more than half a million apps for the iPhone, iPad and iPod touch.

Lodsys is one of several so-called "patent trolls" that have been filing infringement suits against developers too small and poor to pay the legal fees it costs to fight them.
In Lodsys's case, the patents in question were two that Apple claims it had already licensed on behalf of its developers. If Lodsys were to prevail, it might open the door to hundreds of similar suits against the third party developers who have contributed so much to the success of Apple's mobile devices.
"Everyone in this industry understands the importance of ecosystems and developer communities," writes FOSS Patent's Florian Mueller in his analysis of the legal situation. He calls for Apple, Google (GOOG) and Microsoft (MSFT) to send a clear message to developers threatened with infringement suits that they have the legal support of their deep-pocketed patrons.

5 things Apple borrowed from Android for iOS 5

Apple's iOS 5 is slated for release this fall, presumably with iPhone 5. But the Android Army doesn't have to wait, like the iPhone idolators. Android users can have some of those features now. Looks like Apple has been doing a little copycatting. Again.

It's funny, since hardcore Apple enthusiasts are so quick to accuse whenever they see anyone copying the slightest thing from Steve Jobs' company. They're not as fast to acknowledge when Apple does the, ah, borrowing. I'm glad to do it for them.

With that brief introduction, here's my second top-5 list within 12 hours presented in order of importance.
It's coincidental there are two so close together; don't expect this to be habit.
1. Cloud Synchronization. iPhone users had pseudo-sync with MobileMe, which Apple is retiring, but it was nothing like what Google offers Android users. On Android phones, signing into the Google account syncs up all the search and information giant's services -- and when switching phones also restores apps, settings and personalized features, like desktop wallpaper. With iOS 5 and iCloud, iPhone users will get most of the sync benefits Androiders have long enjoyed.
2. Notifications Center. Apple gets kudos for better presentation, but Google had the concept first. Just about Android's best user interface feature is the notifications bar across the top of the phone's screen. Now, instead of annoying notifications that interrupt or are lost in numerical count on an app in another screen, iPhoners can enjoy the convenience of notifications collected in one place and pulled down for easy reference. Google be warned: I know lots of would-be iPhone switchers who stick with Android because of notifications.
3. Over-the-air updates. Apple has made iPhone slave to iTunes for far too long. How ridiculous that iPhone users have to plug in to a computer to update. Androiders have long enjoyed the convenience of OTA. It's about time Apple cuts the update cord that binds the iPhone chain gang. Free them! Freedom!
4. Photo sharing. Android users know the many benefits of using an open system, where developers are allowed to tap into the platform capabilities. One of my pet iOS peeves: Photo sharing. On Android, from the camera or photo gallery, I can send photos to any supported service installed on the phone. So if I want to take a photo and send to Twitter, Android let's me do that from the camera. Oh, but not iOS. Apple presents sharing options for its services but none other.
That will change with iOS 5, which will take Apple's grubby hands off and let third-party apps grab on. Photo sharing will be available from the camera and photo gallery. But why wait, when Android has your back? Today.
5. Twitter. On Android, Twitter is perhaps too much of a good thing. Who really wants to sync Twitter with their contacts? Twitter, like many other apps, can tap deep into Android -- like the aforementioned photo sharing. Apple is following Google, but I must concede going seemingly deeper. Androiders can tweet from some apps, like the browser and YouTube, a capability iPhoners will get from Twitter being integrated into iOS 5.

Apple's iOS5 - breaking ground or breaking hearts?

Many iOS5 improvements were borrowed from existing apps and services.
From what we’ve seen so far, there’s a lot to like about the latest iGadget software update. Previous iOS upgrades have mainly focused on playing catch up with other smartphone platforms, but I’d say iOS5 is perhaps Apple’s biggest update in terms of assimilating great features previously offered by third parties.

Adding handy third-party features to iOS is one of those areas where Apple is damned if it does and damned if it doesn’t. Assimilate new features and it’s accused of acting like the Borg, but leave them out and it’s seen as lagging behind competing platforms such as Android. So should third-party developers take it as a compliment or a slap in the face? If they’re smart, they’ll see it as an opportunity to grab new customers by expanding features to stay one step ahead of Apple.

In many cases Apple’s new iOS features only partially replicate the functionality of existing third-party apps and services. Look at the impressive Dropbox and how it compares to iCloud’s new integration with iWork. It’s a mistake to think that one negates the need for the other, because they actually specialise in different tasks.

Dropbox is handy for getting files onto your iPad, especially if you’re dealing with a wide range of formats from a wide range of devices. Dropbox’s Achilles’ Heel on the iPad is that it won’t sync edited files back to the Dropbox service (there are webDAV workarounds but they take some extra messing about and aren’t foolproof). This is where iOS5’s new native iCloud sync features are certainly useful, if iWork is your productivity suite of choice, as it promises to sync edited files between Pages running on iGadgets and Macs.

Apple isn’t likely to replicate Dropbox’s wider format and platform support any time soon because it’s more interested in improving the i-centric ecosystem. Meanwhile there’s a place for both on your iPad.

Another example is Mobile Safari’s new Reading List feature and how it will impact Instapaper. At first glace Reading List is a death sentence for Instapaper, as it also lets you easily mark webpages that you want to reader later on other devices. Once again, Apple has restricted itself to its own ecosystem - with Reading List only syncing marked webpages between Mobile Safari on iOS5 and Safari on MacOS 10.7. This leaves the door open for services such as Instapaper to cater to a much wider range of devices and platforms, plus add extra features to integrate with other third-party services.



In both cases, Apple’s new features could be a blessing for Dropbox and Instapaper as iGadget lovers discover iOS5’s built-in features and then go searching the App store for something with a little more advanced functionality.

The future isn’t so bright for one-trick pony apps and services which can easily be completely assimilated into iOS. If anything, iOS5 is a timely reminder for developers that you need to think big in order to stay one step ahead of Apple.

Apple Now Worth More Than Microsoft & Intel Combined!

Apple pulled out all the stops at yesterday’s WWDC event. OS X Lion, iOS 5, and iCloud blew my little mind yesterday. So what’s going to blow my mind today?

How about the fact that Apple is now worth more than Microsoft and Intel combined? Yup, that’ll do it!

MacDailyNews totted up Microsoft’s and Intel’s market valuation when the markets closed on Friday and their total sum came to a combined $316.8 billion (MS – $201.59b & Intel – $115.21b).

Apple’s valuation on Friday closed at $317.6 billion, a little under $1 billion more than the two great rivals combined.

During the WWDC keynote, Apple’s SVP of Product Marketing, Phil Schiller told us that there is now more than 50 million Macs on the market. That may not sound too amazing but what is of note is the year over year growth for Macs vs PCs. Mac popularity grew by 28% while PCs declined by 1%.

Apple's iCloud paves way to simplicity

The way CEO Steve Jobs and his colleagues described it, Apple's new iCloud service is an express lane to computing bliss. By allowing users to synchronize music and other content wirelessly through the Internet instead of being held hostage by a stodgy old desktop, Apple has taken the most comprehensive step yet into consumer-based cloud computing.
"Keeping all those devices in sync,'' said Jobs, "is driving us all crazy.''
Cloud-computing, which allows a user to store content on a provider's remote servers and then tap into it easily from any desktop, laptop or mobile device, has been widely used for years now by business and government. With iCloud, Apple now seems to have flung open the doors to the much-vaunted "post-PC world'' and invited the rest of us in -- or at least those of us who use Apple products to increasingly manage our lives.
"I don't know how much easier you can make it for users,'' said Michael McGuire, vice president of research at the tech consultant firm Gartner. "If we keep moving in this direction, putting more and more of our content in the cloud, the next generation of users won't even know what a hard drive is anymore.''
Although some details of iCloud's inner-workings remain a mystery, Jobs presented tantalizing examples of ways that cloud-computing could soon change the lives of Apple consumers, and in a more indirect way, the lives of those who own neither an iPhone nor an iPad.Users of mobile devices, for instance, can use the free iCloud service to automatically upload documents, music and other content to Apple servers, then call them up on any Apple device. In the past, users had to "sync'' their music onto their iPhones, a slow and laborious process that iCloud now eliminates. The PC or Mac, said Jobs, was the hub of all this computing traffic, and it was time for Apple to "demote'' that hardware as the center that all other devices had to go through to grab content.

iCloud will allow users to sync files, apps, app data, and media across iOS devices, Macs and PCs. Essentially, all Apple devices will be able to "talk'' to the cloud, and users can move content to and from the cloud seamlessly, no matter where they are. The new service will let you share your online calendar with your spouse or buy new apps directly using any device you like. You buy the Yelp! app using your iPhone, and it automatically loads onto your Mac and iPod Touch.
iCloud will also automatically use Wi-Fi to back up your content each day, including your latest downloaded book or photo or even device settings. Work on a document on your Mac, shut it down, then work on that same document on your iPhone once you've left the house. Photos can be shared seconds after you take them with anyone in your Photo Stream network, or beamed up onto your Apple TV.
"It all just works,'' said Jobs. "We've made it so that you don't even have to think about it anymore.''
Competitors like Google and Amazon, both of which recently announced their own cloud-based digital music services, "will have a hard time keeping up with Apple now,'' said Jeff Buhl, a product manager in Denver for Jeppesen, which provides aeronautical data for pilots, including through an iPad app. "No one else is anywhere close to Apple as it moves into the cloud. And while companies have had access to it, Apple's now making it the consumers' cloud.''
Where it will all lead remains to be seen. Jobs raised

nearly as many questions about the new service as he provided answers for.
Australian researcher Daniel Woo, head of the Human Computer Interaction Lab at the University of New South Wales, was on hand for Jobs announcement. He points out that even while iCloud offers a way for users to seamlessly move documents and photos among their iPhones and iPads and between friends all linking to the same cloud storage locker, "bandwidth constraints are still a huge challenge.
"So with content like movies, which require so much space, we'll have to see what happens," Woo said. "But just starting with documents, cloud computing will fundamentally change how we write and collaborate on projects.'' Apple, he said, "has planted a flag in the sand, and what developers will do with this will be really interesting.''

Analyst Roger Kay, president of Endpoint Technologies Associates, said Apple's strategy "will legitimize the cloud for consumers. If they only include their own devices in the new service, that may limit the overall impact a bit, though this also might force non-Apple consumers into the Apple world. Either way, this will also provide an opportunity for others, like Amazon, to grow in the space. And Apple has paved the way.''

Google, Microsoft to test Apple's tablet dominance

Google and Microsoft's attempts to loosen Apple's grip on the booming tablet-computer market will be put to the test this week as PC makers unveil new models at the Computex trade show in Taipei. Investors and analysts will be looking to see if Google's Android operating system can match the popularity of the iPad, while Microsoft may preview its next Windows platform for tablets a year after Apple's first offering hit store shelves.

"Investors want to know which tablet is better, which has the best price-performance , and when the non iPad camp is going to get going ," said Angela Hsiang, an analyst at KGI Securities in Taipei. "Previously, people couldn't actually see the products .

At Computex, we'll be able to touch and use them." Acer and Asustek Computer, which upended the computer market when they showed low-cost netbooks at Computex in 2007 and 2008, will demonstrate new tablets featuring Google's Android this week. The operator of the world's most popular search engine and Microsoft will both send executives to the event to meet with reporters and update companies on their plans.

Intel, the world's largest chipmaker, and ARM Holdings , whose chip designs are used by Qualcomm and Nvidia to run tablets, will also try to convince manufacturers that their products are the best as the desktop and notebook markets slow. Global shipments of tablets will climb to 215 million units in 2015 from 17 million last year, Toni Sacconaghi, a New York-based analyst at Sanford C. Bernstein, wrote in a May 26 report.

Fifteen percent of all tablets will cannibalize the sale of consumer PCs, reducing computer-sales growth by 2% annually between 2010 and 2015, Sacconaghi wrote. Competition from new entrants will cut Apple's share of the tablet market to 50% next year, iSuppli said on April 21, from almost 100% when the Cupertino, California-based company began selling the iPad in June.

Apple may unveil ‘digital lockers’ for tunes

Compared with buying e-books, building a digital music collection is a hassle. E-books zip directly to reading devices like the Kindle and Nook and are backed up “in the cloud” — on the servers of Amazon.com and Barnes & Noble. A digital song, on the other hand, is typically downloaded to a PC and must then be manually transferred to an iPod or mobile phone. If you lose your Kindle, you can always download an e-book again; if the PC crashes or the iPod falls into the bathtub, the song goes down with it.
Moving music to the cloud has been an elusive goal for big tech companies and their music industry counterparts, until now.
In the past two months, Amazon and Google have unveiled cloud music services, albeit to mixed reviews and indifference from consumers. These new services let users upload their music collections into so-called digital lockers on the Internet and stream the songs they own to a variety of devices. Both are limited, because neither Google nor Amazon could reach an accommodation with music labels. Label executives say they are negotiating aggressively to make sure they profit from the shift to the cloud. It may be the last opportunity to stem rampant piracy and years of plummeting sales.
Apple, the reigning heavyweight of the music business, may have solved this cloud conundrum. It has reached agreements with three of the four major music labels and is close to reaching terms with the fourth, Universal Music, according to people with knowledge of these deals.
The company could preview its cloud plans as early as June at Apple’s annual Worldwide Developers Conference in San Francisco. The music industry will be watching to see whether Steve Jobs & Co. have discovered a way to quell the deep anxieties of the music biz while creating a flexible, easy-to-use service that isn’t too expensive.
“With a big enough checkbook, anyone can get a deal with the record labels,” says Michael Robertson, founder of an unlicensed cloud music locker called Mp3tunes, which is embroiled in a lawsuit with EMI. “The question is whether Apple’s cloud music service will be consumer-friendly.”
Apple declined to comment.
Apple’s music service, which Engadget and other tech blogs are already calling iCloud, might well represent the future of recorded music. Armed with licenses from the music labels and publishers, Apple will be able to scan customers’ digital music libraries in iTunes and quickly mirror their collections on its own servers, say three people briefed on the talks. Users of the service will then be able to stream their songs and albums directly to PCs, iPhones, iPads, and perhaps one day even cars. And the music industry gets a chance at the next best thing after selling CDs: monthly subscription fees.
“We will come to a point in the not-so-distant future when we’ll look back on the 99-cent download as anachronistic as cassette tapes or 8-tracks,” says Ross Crupnick, a music analyst at NPD Group.
While it may be a huge shift, it won’t be free. Apple no doubt has paid dearly for any cloud music licenses, and it’s unclear how much of those costs it will eat or pass on to consumers.