Nokia has notched up a rare victory against arch-rival Apple as the iPhone maker agreed to settle a long-running row over patents.
Nokia said today the deal would boost second-quarter earnings, having warned at the end of May that it would miss targets.
Shares in the struggling mobile phone maker rose 3 per cent in early trading. Analysts welcomed the news and said it would help Nokia concentrate on core business at a time when it faces huge challenges.
Nokia has lost initiative in the smartphone market to Apple's iPhone and Google's Android devices.
Earlier this week Nomura forecast Nokia would lose its position as the world's largest smartphone maker this quarter to Samsung Electronics and that also Apple would surpass it next quarter.
Apple and Nokia have been locked in a legal tussle since October 2009, when Nokia sued Apple in the United States, arguing the iPhone-maker was getting a "free ride" on technologies patented by Nokia.
Nokia said the agreed deal - which settles all litigation between the two and means both sides will withdraw complaints to the US International Trade Commission - would boost its second-quarter earnings, but said details were confidential.
Nokia warned on second quarter sales and profits at the end of May, abandoning hope of meeting key targets just weeks after setting them and raising questions over whether new chief executive Stephen Elop can deliver on the turnaround he promised.
An Apple spokesman confirmed the deal today.
"We're glad to put this behind us and get back to focusing on our respective businesses," he said.
Legal battles have become increasingly common in the mobile phone industry since Apple and Google carved out a large chunk of the lucrative and quickly expanding smartphone market at the expense of older players.
Nokia, which has said it will be more aggressive in licensing its patents, flagged further legal battles were ahead.
Analysts said makers of Google Android phones were the next likely target. However, they also warned the company still had a long way to go towards any recovery.
Technical analysts said Nokia shares had been in oversold territory since late May and momentum indicators had been signalling that it was ripe for at least a short-term, technical rebound.
The shares are still down about 25 per cent since May 30th, representing a €5.5 billion wipeout in market capitalisation for one of Europe's biggest technology companies.
Reuters
