Nokia-Qualcomm Truce: Bad News For Motorola

Nokia and Qualcomm buried the hatchet this week, deciding to settle matters out of court and become friends. While the details of the settlement aren’t clear, The Wall Street Journal reports that as a result of this settlement, Nokia will pay less to Qualcomm. The deal ensures that Qualcomm continues to get money in the 4G era regardless of WiMAX and LTE technologies.

The deal also paves the way for Nokia to aggressively chase the U.S. CDMA opportunities. The company has been desperately trying to get a toehold in the U.S., but has failed to get carriers to cozy up to its handsets. AT&T will introduce five Nokia phones this year, but it is with the CDMA that Nokia can have an impact.

In order to get going, Nokia has been willing to make concessions to meet the needs of carriers. Verizon recently launched Nokia 6205. Thanks to the truce, it is not impossible to imagine Nokia phones with Qualcomm’s Brew OS.

Nokia, according to some of my sources, feels that a feeble Motorola is ready to be knocked over from its strong position with two CDMA carriers, Sprint and Verizon. Analysts estimate that Motorola sales are going to suffer mostly because the company doesn’t have the handsets to match the onslaught from Apple, RIM, Samsung, LG and even Nokia. And the fact that Motorola is spinning out its handset business…even carriers are starting to wonder if they can count on the beleaguered mobile phone maker. Nokia wants to step into the breach and become a bigger player in the U.S. Nokia’s current share of the U.S. mobile market is about 6 percent.