Qualcomm and Nokia: It's a Bitter battle

Qualcomm is huge in the cellular industry.  A lot of people wouldn't recognize the name but if you look at your phone (a Sprint one, at least) you'll probably see a "3G by Qualcomm" (or something to that effect) sticker on the back.  Qualcomm makes the chips that make millions of cell phones do their thing.  They also hold the patents on other chips that make other cell phones do their thing.  Nokia's phones, for instance.

From Reuters

HELSINKI (Reuters) - Cellphone maker Nokia (NOK1V.HE: Quote, Profile, Research) said on Sunday its agreement in a U.S. court in Delaware with Qualcomm was unlikely to solve the major legal battle over patent fees between the two technology heavyweights.
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The companies have been at legal loggerheads since they failed to renew a part of their 2001 technology licensing pact that expired last April. Analysts have estimated Nokia pays around $500 million to Qualcomm annually for patents and wants to cut the sum.

Qualcomm's head of European operations, Andrew Gilbert, told Reuters in an interview earlier this month, the company did not see smaller payment as an option.

"We want them to pay what they should be paying ... as soon as possible," Gilbert said in an interview at Mobile World Congress trade show.

In 2007 Nokia's handset profit was $5.434 Billion.  While that's an impressive number, it isn't like they can just shrug off $500 Million.  The courts are going to decide if Qualcomm's patent policy is illegal, as alleged by Nokia.  If so, Nokia may get the price cut it's looking for and get to pay less than half a billion dollars per year in licensing fees and (hopefully) be able to use those savings to cut prices.

We'll keep you up-to-date as the case develops.