The Nokia headquarters is seen in Espoo, Finland, July 28, 2015. REUTERS/Mikko Stig/Lethikuva

By Jussi Rosendahl

HELSINKI (Reuters) - Nokia said it had settled a lengthy patent dispute with South Korea's Samsung <005930.KS> on Monday, but investors were disappointed by the financial terms of the deal.

Nokia's shares fell more than 10 percent after the Finnish firm said the Samsung deal would lift patent unit Nokia Technologies' sales to around 1.02 billion euros ($1.1 billion) in 2015, from 578 million euros in 2014.

The patent business is set to become a smaller part of Nokia after its proposed 15.6 billion euro takeover of French network gear rival Alcatel-Lucent , whose shares fell by 11 percent following news of the Samsung patent deal.

Samsung's stock was up by 1.1 percent.

Nokia shares have fallen since the announcement of Alcatel-Lucent deal last April, partly due to the dilution of the patents business and also due to worries about integration.

The annualized run-rate for its patent unit following the Samsung deal is now about 800 million euros, Nokia said. This compared with average analysts' forecasts for the unit's 2016 sales of about 900 million euros.

"There have been expectations that Nokia could make more money with their patent portfolio than (rival) Ericsson.. This outcome did not support that... Estimates will be revised," said Nordea analyst Sami Sarkamies, who has a "hold" rating on Nokia.

Sweden's Ericsson , which recently signed a license deal with Apple , has a patent sales run-rate of about 1.2 billion euros.

In 2014, Nokia sold its once-dominant phone business to Microsoft , leaving it focused on telecoms network equipment while retaining a large portfolio of handset patents.

Samsung and Nokia entered into a binding arbitration in 2013 to settle additional compensations for Nokia's phone patents for a five-year period starting from early 2014.

Nokia added it expects to receive at least 1.3 billion euros of cash during 2016-2018 related to its settled and ongoing arbitrations, including the Samsung award.

Nokia currently has a similar dispute with LG Electronics <066570.KS>. It is expected to start talks over a new contract with Apple in the coming years.

Some investors criticized the way Nokia had communicated the settlement, while expressing surprise over the scale of the share price movement given the relatively sizes of Nokia Technologies to its networks business.

"The company should be more explicit, investors are left wondering for example on the Technologies (unit's) actual topline forecast for 2016," said Juha Varis, a fund manager at Danske Capital.

"I'm mostly surprised over the share reaction. Considering the increasing significance of (the) network business for the stock, this is a very strong movement," Varis, whose fund owned 0.08 percent of Nokia shares as of end-December, said.

($1 = 0.9219 euros)

(Editing by Terje Solsvik and Alexander Smith)