Nokia, Qualcomm tie up after years in court battles

Top cellphone maker Nokia will use Qualcomm's chips in its advanced cellphones, the firms said on Tuesday, marking a further warming of ties between the former courtroom rivals.

The cooperation gives Qualcomm access to a major share of the smartphone market, while it enables Nokia to further lower production costs.

"In the end of the day Qualcomm needs Nokia as much as Nokia needs Qualcomm," said Gartner analyst Carolina Milanesi.

The deal marks the first time Nokia will use Qualcomm chipsets in its 3G phones, and brings the firms closer together after years of bitter disputes over intellectual property rights and royalty payments.

"We are very very excited about this opportunity," Andrew Gilbert, the head of Qualcomm's European business told the media in an interview. "We are going to compete for as much of their business as we can."

Nokia's key suppliers of 3G chipsets have been Texas Instruments and STMicro, which has spun off wireless chips into a joint venture with Ericsson.

Nokia and the new ST-Ericsson venture said on Tuesday they would cooperate on providing ST-Ericsson's U8500 chips for 3G smartphones using Symbian foundation software.

Nokia said on Tuesday it had tapped also Broadcom , its current supplier of second-generation technology chips, to supply 3G chipsets.

Nokia eyes U.S. Market

Nokia and Qualcomm agreed last July to a 15-year settlement that included a hefty 1.7 billion euro one-time payment from Nokia, ending a three-year legal battle where the firms raised dozens of cases against each other on three continents.

The agreement also comes against the backdrop of an ailing cellphone market, with 2009 sales set to drop as consumers rein in spending on new gadgets due to the economic recession.

Nokia said it would introduce the first model using Qualcomm chipset and Nokia's software in the middle of next year.

The phones would initially be for the North American market and work on third-generation networks and run on the Symbian operating system, the most widely-used smartphone software that is currently controlled by Nokia but will eventually be made royalty-free for all users.

Nokia shares were down 2.2 percent at 9.11 euros on a weaker Dow Jones Stoxx European Technology Index.

"I don't see the markets reacting since the products are expected to be sold only around mid-2010," said Nordea analyst Martti Larjo. "(But) at least the cooperation shows that Nokia is focusing its efforts on the North American market."

Nokia has long struggled in the U.S. market. North American sales dropped 20 percent year-on-year in the fourth quarter, and Nokia's North American market share of some 8.7 percent was well below its global figure of 37 percent.

Agencies

Oracle cuts 500 jobs, says report

Oracle Corp. has trimmed its workforce, but not as much as some people had speculated, The Wall Street Journal reported on Tuesday.

Citing people familiar with the matter, the newspaper said the software giant cut around 500 positions in its North American sales and consulting businesses on Friday.

The Redwood Shores, California-based company had 33,526 employees in the Americas at the end of November and 86,657 globally, the report said.

An Oracle spokeswoman declined to comment to the newspaper and could not immediately be reached.

The Journal said the Internet has been buzzing with rumors of cuts of up to 10 percent of the company's workforce, a move that would affect thousands of people. Some analysts have put the number in the hundreds.

Agencies