Ailing Nokia goes back to patents for rescue

by Paul Wilson | Saturday, May 12, 2012 | 509 views

In a desperate move for tiding itself with cash till sales are ramped up through new products , mobile manufacturer Nokia is intensifying the royalty quest from rivals , with Nokia’s designs being used as their technology base.

Presently also , Nokia makes $647 million a year from the firm’s patent royalties in important fields such as mobile telephony . Analysts are of the opinion that if the patent rights are applied with more determination , Nokia could stand to make hundreds of more millions boosting its income. Also , a strategy to sell the patents could help them making billions of euros.

Given their future is threatened with declining sales and losing market share , patents have come out as their most stable and valuable asset. The exploitation of the same in an effective manner could be the key to a long-term survival in the cut throat market. Some analysts also believe that Nokia should have taken the step long ago , and not waited for this long.

Newcomers in the mobile manufacturing world , not having licensing agreements with Nokia ,  have already been warned by Nokia that it is aiming to boost the royalty revenue. Even last week , two makers of mobile devices  based on Android were under Nokia’s radar.

HTC and ViewSonic have already been sued by Nokia over infringement of software patents and mobile technology , while those using Android are next in line for the same. Chinese and Indian vendors are very likely to be its fresh targets , besides Amazon.Com Inc. ZTE Huawei and Micromax are mostly probably going to be the next targets.

There was no official word from Nokia on the same , but mark Durrant , the spokesperson , in his statement made it clear that its actions against the likes of RIM, HTC and ViewSonic are clear indications that the firm will be taking fresh steps , and going beyond essential patents to those for which they have no licensing obligation. Huwaei , Micromax , ZTE and Amazon couldn’t be immediately contacted for their comments. Nokia is a patent powerhouse , with the largest portfolio of patents in the industry, along with the likes Ericsson and Qualcomm ; going back by almost 20 years.

The reason behind the aggressiveness in stance is easy to decipher . With sales of new Nokia Lumia phones not making up for the diving sales of its legacy phones and the company losing out in the smartphone markets to the likes of Samsung and Apple , the cash reserves of nearly $6 billion will be dwindling soon.

Ratings by both Fitch ratings and Standard & Poor have cut down Nokia’s ratings and given it the “junk” status.



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