Nokia settles patent dispute with Samsung
Print Edition
NOKIA said it had settled a lengthy patent dispute with South Korea’s Samsung yesterday, but investors were disappointed by the financial terms of the deal.
Nokia’s shares fell over 10 percent after the Finnish firm said the Samsung deal would lift patent unit Nokia Technologies’ sales to around 1.02 billion euros (US$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 rose 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.
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