Last weekend, Nokia has sold a block of its patents to the
patent holding companying, Pendrell Corp. The sale consists of 125 patents and
patent application worldwide, 81 of which have been declared by Nokia to be
essential to applicable standards. The aggregate value is more than $12
billion. Pendrell has created a new wholly owned subsidiary, Helsinki Memory
Technologies (HMT) to manage the patents. Nokia will receive a license to all
of the patents acquired by HMT and to new IP developed by HMT. Nokia has always been the portable,
embedded flash technology pioneer in the field of development and evolution of the company. The 125 patent
and patent applications that are sold this time are widely used in electronic equipment,
involving more than 8000 models
of consumer electronic devices; such
as mobile phones, laptops, and tablets. We have to notice that this is the company’s
second major sale of patent since last June.
Nokia’s series of action
lead me to think of Motorola, the “big brother” in mobile communication industry.
However, compared to Nokia, Motorola’s situation is more passive. Is Nokia going
to be another Motorola? I hope not. Although Nokia has lost patent, the longstanding
cash cow, the huge number funds Nokia get now is very useful for them. If Nokia
use it properly, it can make more money through research and development. It
would be extremely helpful for the mitigation of the Nokia’s short-term crisis.
If Nokia wants to rise again, the most important approach is to explore new
content of mobile functionality. Patent won’t save Nokia forever. Nokia’s most serious
problems are the wrong judgments in the industry trend and delay in the introduction
of new products. Nokia’s current situation should alert some companies that are
willing to make money through patent wars. They should keep in mind that innovation
is the only approach that would keep the company in the industry.
Nokia has definitely been making headway by strategically using its old patents to help it make strides economically in today's market. It will be interesting to see Nokia climb its way back up, if it does.
ReplyDeleteit's interesting to see how nokia would make use of the decreasing inventory if doesn't "climb its way back"
ReplyDeleteit must have been a tough decision for them. the patents could have been used as a perpetual cash cow, but now that they have sold them, there is definitely more risk of Nokia's future. the sale of the patents itself also brings about another question of how to value patents, and to know if they are underpriced or overpriced.
ReplyDeleteI think that's an interesting comparison between Motorola and Nokia. Nokia is definitely trying to unlock as much value as it can as it tries to gain market dominance in the smartphone arena. Nokia's handsets and other merchandise have been losing market share to China companies, so patents provide an easy way to gain fast, easy revenue.
ReplyDeleteNokia would need to think much more ahead than the current mobile giants if Nokia wants to get back to the game. The reason why Nokia was declined from its original mobile giant was it missed the mark when 2G was introduced. When Nokia finally realized how much market it lost, Nokia had to think about 3G and just ignored the 2G technology. It would be difficult for Nokia to climb its way back. However, I think Nokia should really take a look at their old patents, and improve from those. They might find something similar to adapt like when Android infringed the tethering feature from a 1990s patent.
ReplyDeleteI'd like to see how many licensing agreements Nokia receives in 5 years from now. This may have been a way for them to receive free R&D from another company since they'll receive licenses for all future patents HMT develops.
ReplyDelete