Apple could be faced with a bill topping US$1 billion if Nokia is successful in its legal action against the iPhone-maker over wireless patent royalties, say analysts. Neil Mawston at Strategy Analytics told Reuters that Apple may have to pay Nokia anything between US$200 million and US$1 billion for patents used in the 34 million iPhones shipped to date. Commentators say the claim could be substantial because Nokia is one of the key patent holders in mobile technologies, alongside Qualcomm and Ericsson. “It is almost inconceivable that someone can produce a mobile phone without using Nokia patented technologies,” said Ben Wood, research director at CCS Insight.

In a complaint filed with the Federal District Court in Delaware last week, Nokia – the world’s largest handset vendor – accused Apple of violating ten of its patents which it said were “fundamental” to making devices compatible with the GSM, UMTS (3G WCDMA) and wireless LAN standards. The patents cover wireless data, speech coding, security and encryption and affect all the iPhone models shipped since its introduction in 2007. Nokia said in its court filing it had made several price offers to Apple on per patent and on portfolio basis, but had these declined. Analysts in the Reuters report note that the current patent royalties system in mobile devices often forces new market entrants to pay around 15 percent of the sale price of 3G phones to patent holders, compared to just a few percent for established players. “Intellectual property licensing costs create a significant barrier for late entrants into the mobile phone space. As a result they become net payers to the big established players such as Ericsson, Motorola, Nokia and Qualcomm,” said CCS Insight’s Wood.