In the biggest rapprochement since Nixon went to China, Nokia and Qualcomm today announced that Nokia is going to start buying chips from Qualcomm.
The initial plan is to develop 3G mobile devices, initially for North America, which use the Symbian OS and Qualcomm's mobile station modem chip-sets. The first products are due out in 2010.
"We are eager to demonstrate to the industry the possibilities that exist when innovative and open software is combined with advanced hardware solutions," said Kai Oistamo, executive vice president, Devices, Nokia.
"This new level of cooperation will bring exceptional leaps in mobile performance to people around the world," said Steve Mollenkopf, executive vice president of Qualcomm and president of Qualcomm CDMA Technologies
It wasn't always so. Qualcomm's name was always ostentatiously absent from Nokia's lists of approved chip suppliers, even though Qualcomm is the world's largest supplier of wireless chips.
That's because, for many years, Nokia has fought through the law-courts with Qualcomm over, inter alia, Qualcomm's licensing practices on CDMA.
CDMA was by far the best 3G technology, and was developed single-handedly by Qualcomm, and in exchange for the worldwide mobile industry adopting the technology for the standard at 3G, Qualcomm agreed to license the technology to companies on fair, reasonable, and non-discriminatory terms.
When it came to the crunch, Qualcomm was said to want a royalty of $5 a handset, regardless of the handset's selling price, which was seen by the wireless industry as very far from fair and reasonable. Moreover companies buying Qualcomm chips were offered special prices so it was also seen as far from non-discriminatory.
The fear in the worldwide wireless industry was that Qualcomm was trying to do to the wireless industry what Intel and Microsoft did to the PC industry - to get an intellectual property lock on the industry and then suck out most of the profit from it for themselves.
As with the PC industry, that would have left most of the wireless industry working on threadbare margins.
Nokia went into battle in the courts and, after a monumental series of lawsuits all over the world, the two companies decided to ask the whole thing to be decided last July by the Court of Chancery in Delaware. Just before the hearing Nokia and Qualcomm settled the case.
Immediately afterwards I asked Nokia if the settlement would change the habit of a mini-lifetime and buy its chips from Qualcomm. "It removes any obstacle", replied a Nokia spokesperson, "but there's no commercial agreement."
Now, today, there is a commercial agreement.