For those who came in late, Apple sued Nokia claiming it was being over-charged for licensing patents. Nokia counter-sued saying that Jobs’ Mob was not paying its licence. The case was expected to drag on for years and was hurting Nokia’s share price.

Nokia said that it had settled its patent dispute with Apple and signed a business collaboration deal with the US giant.

Nokia said it would receive an upfront cash payment and additional revenues from Apple starting from the current quarter. It did not give details of the amounts which leads many cynics to believe that it caved in to Apple’s demands.

Nokia's Chief Legal Officer Maria Varsellona said that this agreement moved its relationship with Apple from being adversaries in court to business partners.
However, Nokia has been a business partner with Jobs’ Mob before. A previous patent licence contract between the companies expired last year and both sides took legal action in December.

In December, Nokia cut its annual run-rate forecast for patent and brand licensing sales to about 800 million euros ($900 million) from 950 million euros, in the absence of a new Apple deal. In its last quarterly report, Nokia stopped giving an annual run-rate forecast.

Under the new business agreement, Nokia said it would provide network infrastructure products and services to Apple while Apple would resume carrying Nokia's digital health products in its retail and online stores.

The firms will also look into further collaboration in digital health, Nokia said.

This line of attack is identical to the line being used by Apple against Qualcomm. The difference is that Qualcomm is not as fragile as Nokia and appears so far to be telling the outfit to go forth and multiply.

Apple has to take action as its iPhone cash cow is slowly dying. Western markets are saturated, developing markets can’t afford it, and Chinese buyers want more bang for their buck. The only way to prop up the ridiculous amounts of cash Apple makes from the iPhone is to increase its margins by getting parts makers to reduce their prices.