Rajeev Suri, president and chief executive officer of Nokia.
Rajeev Suri, president and chief executive officer of Nokia. Photograph by Tomohiro Ohsumi—Bloomberg via Getty Images

Here’s Why Nokia Shares Are Falling Today

Dec 22, 2016

Nokia shares fell more than 4% on Thursday as analysts warned a legal battle with Apple could delay for years royalty payments that are vital to shoring up the Finnish company's profits.

Nokia's (nok) patent license contract with Apple expires at the end of the year. This week, both sides have taken legal action—with Nokia accusing Apple (aapl) of violating some technology patents and Apple complaining of being overcharged—suggesting a new deal will be hard to agree.

Patent royalties represent a sliver of Nokia's overall revenue, more than 90% of which comes from sales of telecoms network equipment. But the licensing payments are highly profitable at a time when the network business is suffering an industry-wide slump.

"Nokia will likely be granted a better license deal from Apple. But because of the dispute, it could take years to reach a new contract, and royalties will likely come (as) retrospective one-time payments," said Inderes analyst Mikael Rautanen, who has an "accumulate" rating on Nokia shares.

Once the world's dominant cellphone maker, Nokia sold its handset business to Microsoft in 2014 and focused on its network business as well as a bulging portfolio of mobile device patents.

Get Data Sheet, Fortune’s technology newsletter.

Wells Fargo Securities analyst Maynard Um, who follows both companies, said the lawsuits were negative for Apple and Nokia due to litigation costs and uncertainty over the outcome.

"The fact that this did not go to arbitration suggests, to us, that the two sides must be far apart in what each party wants," he wrote in a note to clients.

"It appears (Apple) is not arguing the validity of the patents but, rather, the rate it deems fair," he said, adding Nokia could also "choose to file a suit with the International Trade Commission (ITC) to bar Apple from importing handsets into the U.S." Um rates both companies' shares as "market perform."

Nokia's patents cover technology that reduces the need for hardware components in a phone, conserves battery life, increases radio reception, helps in recovering lost phones and enables voice recognition, among other features.

All products and services featured are based solely on editorial selection. FORTUNE may receive compensation for some links to products and services on this website.

Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. Dow Jones Terms & Conditions: http://www.djindexes.com/mdsidx/html/tandc/indexestandcs.html. S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions