Qualcomm ratcheted up the litigation this week when it filed suit against Apple contract manufacturers Foxconn, Pegatron, Wistron, and Compal, for skipping royalty payments. The chipmaker said in April that Apple is withholding payments to its contract manufacturers to cover the royalties they owe Qualcomm. Moreover, Qualcomm alleges that Apple ordered the companies to withhold the funds, and has indemnified them.
Messy as the fight with Qualcomm has become, Wells Fargo (WFC) analyst Maynard Um suggests that Apple's dispute with Nokia (NOK) is a bigger near-term concern. Nokia filed suit in two German venues, a U.S. District Court in Texas and other venues in December, alleging patent violations.
"While most of the focus has been on [Qualcomm] given the recent headlines, we believe the Nokia litigation is more important with the potential for initial news flow as early as the end of calendar 2017," Um wrote.
Nokia has filed complaints in Munich and Mannheim, Germany that could have rulings this year this year. Other disputes, such as a complaint in the Netherlands, could reach outcomes soon after.
Um estimates that Nokia previously received just 0.2% of the price of the device in which Apple uses its technology. Nokia is unlikely to score the 2.7% rate that Qualcomm receives, Um suggested. If Nokia could obtain a 1.5% rate, it could reduce Apple's earnings per share by 20 cents.