Vringo to acquire 500 Nokia patents…for $22m :/
DailyMobile reports that around 500 Nokia patents have been bought by Vringo for a sum of about $22 million, of which Nokia gets 35% of any royalties should Vringo exceed a $22m revenue. I am not even going to try and pretend I understand the significance of which patents are up for sale, but the excerpt says:
Thirty-one of the 124 patent families acquired have been declared essential by Nokia to wireless communications standards. Standards represented in the portfolio are commonly known as 2G, 2.5G, 3G and 4G and related technologies and include GSM, WCDMA, T63, T64, DECT, IETF, LTE, SAE, and OMA.
http://www.dailymobile.net/2012/08/09/nokia-to-sell-500-patents-to-vringo/
Note, not all patents are of equal value, so we can’t just assume that such a more patents = higher value. In my extremely limited view, Nokia could be trying to monetize the patents that they have which could possibly be sitting idle, concentrating further into core aspects of smartphone production. Or, Nokia could be selling the silverware in preparation of minimising the losses from the duds that we’ll see in September. Got your wads of cash ready for your new iPhone/Droid?
- http://www.engadget.com/2012/08/09/vringo-nokia-patent-sale/
- http://thenextweb.com/insider/2012/08/09/mobile-tech-firm-vringo-to-sell-31-2m-worth-of-stock-to-buy-ip-from-nokia-and-more/
- http://online.wsj.com/article/BT-CO-20120809-711134.html
Category: Nokia
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It all comes down that Nokia is dead like a motherfucker
point blank period
+1
the only dead thing is nokia’s patents sitting idle
nokia is trying to generate an income from its patents,
it keeps the rights to use them and gets 35% of any royalties that vringo gets,
http://www.reuters.com/article/2012/08/09/idUS167779+09-Aug-2012+HUG20120809
from the link
“One of the most compelling facts about Vringo’s acquisition of Nokia’s patents is that David Cohen, in house council for Vringo, was formerly the senior litigation council for Nokia. During his time at Nokia, Cohen managed the successful world wide litigation against Apple Inc. (NASDAQ:AAPL) which resulted in a reported $715 million settlement, plus ongoing royalties for every iPhone sold worldwide.
Industry observers are following the current Vringo vs. Google case closely and many believe that it could be worth billions. Due to the foundational nature of Vringo’s newly acquired portfolio, some analysts anticipate that there are several multi-billion dollar companies that may infringe on this technology.”
35% after vringos recouped their $22million and in the world of accountants that means never
You would be in a position to state something like that how, exactly?
Note that it says “gross revenue”.
which in turn means the patents are obviously not worth $22 million, which means Nokia did was clever by selling them.
But don’t worry, I am sure the future holds many more opportunities for you to turn everything into yet another doomsday
+1
with David Cohen in charge, and a fresh batch of ptents, they could name themselves as trolltech
Congrats to Elop and all his supporters
You guys really help Nokia gets where it is standing right now.
You guys must be so proud.
All the money from selling every each of Nokia companies, patents, workers, etc will be funded to Lumias/WP/Microsoft.
What left of Nokia is just an OEM that make apps and assemble phones for Microsoft.
You are missing the location-based services ascept – and feature phones. And whatever added value Nokia is building. And NSN. And all the R&D they are doing. I’d say there is still good potential they can be a lot more than just an OEM.
But I do agree they are pulling out of the high-end mobile operating system development for now.
About NSN – it is really good question what future will bring to NSN…
Yes, they have a portfolio of businesses. If you take out the handset business, the corporation becomes rather boring. It would be as interesting as following Nokia tyres.
“they are pulling out of the high-end mobile operating system development for now.”
So you still hope, think that there will be OS work for Nokia in the future. No way. They’ve lost all creedibility amongst devs so rehiring people would be tough job. Ofcourse they can, again, buy some tech. Also, all of the Nokia’s remaining front men/women have said that OSs are not important anymore ie they are bulk.
Personally Im not that interested on the OS tech itself. That is a still a core part of UX and the ownership is critical to the openness. Im for open standards and sadly there seems not to be any choise left after Nokia gave up voluntarily. It will take ages, if ever, they can have influence on the WinX UX. I wouldnt be suprised, if they introduced UX formely-known-as-Metro in S40 as well. That would be the onyl logical thing to do.
If Nokia remains unbought and can navigate through this crisis, then why not – depending on where the world is turning. There are very few certainties in life. I’m talking about a long-haul (years and years down the road), not any short or midterm, which clearly seems to be void of such things. But just to clarify: I do agree after the June shower Nokia seems to have pulled out of all high-end OS development.
For us, for the most part, of course. However I fail to see what that has to do with my response to Maybe which was just disputing his notion that Nokia is now only making stuff for Microsoft’s benefit. Also, the location-based stuff might be very compelling for end-users as well.
” What left of Nokia is just an OEM that make apps and assemble phones for Microsoft.”
amen
Considering the Q3 predictions, even the most optimistic ones, Nokia needs every single dollar they can milk to present themselves as a company with a viable future, to protect shareholders’ value and, linked to that, prevent takeover bid with what else would be a very steep decline after the Q3 profit warning…
For that reason, Nokia is selling the silverware. The problem being that many of the companies/entities interested in a takeover probably waited for Elop to cut off parts of Nokia that might not interest them and thus lower the value for the take over. Patents being one of the prime reasons why would anyone be interested in takeover of Nokia were still firmly held up until a couple of months ago… If the gambling addict Elop continues selling the silverware to fuel his `this time next year…` dreams and illusions, I’m afraid someone will step up and buy Nokia outright before Elop manages to remove the only real value left in Nokia.
I wish some one would step up and buy it already
I wonder if Nokia could use any of these sales to bolster their results? I mean, they aren’t exactly operative income. Sure, it is cash management and streamlining, but I doubt this is directly about any profit warnings. I’m not sure how things work in a business this size (or what the English terms are, sorry), but I’m guessing you can’t use one-time sales of businesses as operational profit.
Glad that it’s not like three weeks ago you were dancing around Nokia’s cash position that the company is still strong…
Way to miss my point. I was merely commenting the “profit warning” part. Any sale with money coming in will of course help with cash, but it isn’t necessarily operational profit that can be used to avoid a profit warning – that was my point. Not that I’m expecting a profit warning necessary, incognito was.
Since these sales were quite expected already prior to Q2 results (the patent sales were announced in May at the AGM, where I was present), I’m not making any hasty conclusions about them. Nokia is streamlining, the transition did hit them hard, but they are taking the steps to keep things healthy. As long as they can manage not get to bought.
Cash is not the problem short-term problem for Nokia, acquisition risk is. People are making way too much doom and gloom assumptions about the cash situation.
As far as I can see his point was that the profits/loses will be bad, so Elop wants to at least work on the cash. And anyway, it’s only thing Elop can do, WP failed and it’s MS who is calling the shots.
You can maintain cash as long as you have things to sell. Deals like this, where Elop is trading long term stream of money for immediate cash gain, or the “prepayments” from MS, indicate the situation is quickly deteriorating, and he is in classical wall street mode of boosting next quarter numbers while shifting the costs into the future.
Where is the prepayments from Microsoft documented? I can’t find it in the quarterly report.
As for deals like this, this one does have a long term stream of money included in it too.
I’m talking about the 400M prepayments, you cited it here too.
But the report specifically lists them as IPR payments and platform support payments are listed elsewhere. The common wisdom seems to suggest the IPR payments are from Apple, with whom Nokia made the deal in Q2/2011 for on-going payments. This would suggest in Q2/2011 they got money for 2011 and prior, in Q2/2012 money for 2012 and so on…
Nokia specifically says they received a 250 million quarterly platform support payment in Q2. (Just like they said in Q1.) If they also had received an advance payment for Q3 on the platform support, don’t you they would have been obliged to say so instead of baking it inside “IPR pre-payments”?
You are right, the 400M aren’t just from MS. Reading the passages from fillings again I don’t know how I arrived to that conclusion previously.
I would go as far as to say none of that 400 million pre-payment is a platform support payment from Microsoft. I don’t think anything in the quarterly report supports the MS platform support pre-payment theory, quite the contrary.
Unless there is some other source?
Maybe Nokia sold these patents to a patent-troll company to generate some revenue of it without harming its own brand (by patent-trolling) and without using its own (expensive) lawyers. They may not be convinced these patents can be monetizied that easily otherwise they would try themselves.
I really don’t believe with billions in cash they need extra 22 mil., they must be after something bigger or felt it wasn’t easy case.
Elop is burning something like one billion per quarter, so without continual replenishment by selling assets the cash position would quickly deteriorate. I think the fact that they are trading large parts of long term money stream for quick cash gain now strongly suggest they are doing it primarily for the money. Of course there are probably other motives in play, like the patent trolling on behalf of MS or to take patents out of Nokia’s direct control to deter possible overtakes.
As you know, their cash position improved YoY in Q2 so hopefully most the cash bleeding has stopped/is stabilizing. They do need to SAVE more money in operational costs, hence the plant closures, job cuts, R&D cuts, in addition to sale of some assets (and more aggressive monetazing of patents). Sale of Qt probably saves them over the next two year more in operating costs than its sale brings in cash right now (I suspect they go nowhere near what they paid for it in 2008).
I wonder if, when the Q3 YoY cash numbers are out, you will say that Nokia is again collapsing. Or actually I don’t. I’m sure you will dismiss the significance of the exact same number you are cheering now and instead dig up another isolated and not completely disastrous one to claim Nokia is still stabilized.
I’ll save you the trouble. I doubt anyone here is expecting anything short of a disasterous Q3, so it will be bad and I’ll say it for you now, on the record. But Nokia can survive that unless they are bought by someone, due to the low stock price.
Like I’ve been saying for many quarters now, my eyes are on the Q4 results when they roll out in January, because we’ll see if Nokia’s WP8 is catching on – and if Lumia has been able to sustain a momentum on the right track up.
And who was saying Nokia wont survive Q2 or Q3? You are battling straw man.
But it shows what Elop did to Nokia when it’s seen as positive thing worth debating that company with billions in assets and generating billions of profits didn’t completely disappear five quarters later.
Or Symbian did the damage… Depending on whom we believe.
Actually, I’m fairly confident some people said Nokia wouldn’t survive Q3. But e.g. incognito above suggested Nokia would not survive if Q4 is bad.
I think people are underestimating Nokia’s asset-position a lot. However, they may get bought. That is true.
It’s different thing to say that Nokia wont survive (meaning will run out of cash) in Q3 or Q4, and to say Nokia won’t survive (meaning in the long term) if they wont do great in Q4. The latter is just simple observation that without big turnaround Nokia doesn’t have a chance, but they can wander around like zombie for some time until Elop sells everything.
Actually, it’s not outdated, it’s straight out of the latest Q2 results, see operating profits or QoQ cash change.
Your claim was Nokia burning cash at a rate of a billion a quarter. Right?
In fact, Nokia had a positive operative cashflow of plus 102 or so million in Q2/2012. Yes they did. Now, it is true their net cash went down 675 million (not a billion), however this is because of a 742 million dividend paid.
Had they not paid a dividend, Nokia would have actually made a cash profit in Q2! Accounting rules would have still shown some accounting loss, but in actual monetary fact they would have made money in Q2, had they not paid dividend. I actually wish they hadn’t paid, but OTOH them paying shows faith in the company and its prospects.
The even bigger IFRS losses are not cash losses at all, they are a complex system of accounting rules that create numbers based on certain perceived value changes (see Microsoft’s losses past quarter when in actual fact they made *billions* of money that quarter). But it is not a measure of actual monetary fact.
Why so restrained? Why not to say that Elop is bringing in tens of billions? Because if you and Viipottaja are going to randomly ignore various expenses, then what you can’t argue?
Of course you can’t ignore the dividends, if only because it was anticipated payment and they did a lot of cash boosting they wouldn’t need to do otherwise.
Even if we don’t ignore the dividend, Nokia didn’t loose a billion, but 675 million. That was my point (too).
675M euro is $830M, 836M euro is $1015M
Nokia is headquartered in a country using euros and all the interim reports we are discussing are reported in euros.
Heck, even Nokia’s 20-F to SEC in the U.S. reports in euros. I think it is fair to stick to euros.
But sure, I’m sure I can come up with trillions of losses for Nokia in some currency. Damn that Elop. Trillions!
Dividends are certainly not losses. They aren’t even costs/expenses. Dividends are simply a way for the people who own the company to move money from one pocket (company books) to another (their own bank account).
Calling it a loss or expense is as silly as claiming that I lost 1000 euros as I transferred it from one personal bank account to another.
@Janne
Except dollar isn’t just another random currency, it’s the main currency enabling comparison and for that reason it’s used in the press and by almost everyone. Even the Nokia reports aren’t full of only euros, for example the platform payments from MS is quoted in dollars, with euro sum in parenthesis.
@Zipa
We are not talking about shareholders, but about the company. From the Nokia point of view dividends are negative and are reported as such in the books.
nn, their cash was up YoY. You seem to keep ignoring that fact. Second, Q2 in 2011, AFAIK, was also the dividend payment quarter. Third, if Q2 had not been the dividend paying quarter, a yearly “extraordinary” occurrence, their cash would have been up QoQ. I am not ignoring anything, just stating a few facts.
It is ok to admit a few facts, it doesn’t invalidate other arguments. Other facts include, like I have said a few times in this back and forth too, that they have to cut costs further (hence, good riddance, e.g. the sale of Qt, and, more unfortunately, lay off of more people).
Actually, looks like you did not read what I said so let me repeat:
Q1 to Q2 cash situation would have been fairly stable without the 740+ million dividend payments.
Q1: 4872 million
Q2: 4197 million
Q2 if no dividend: 4939 million.
Elop the liquidator !!!
Oh, no, I wasn’t referring to bolstering their results regarding profits, but to dampening the sure strong hit of another profit warning. If they increase what they have in their coffers substantially before they release the Q3 warning (probably in a week or two) it won’t be perceived as harsh as it would normally, thus saving a great deal of percents on the stock market, and what’s more important – presenting a stronger image than it really is and making the takeover vultures circle some more before attempting to have a feast.
Also, pretty much everyone expects that Q3 will be their highest loss quarter in recent history, or rather since their beginnings – Microsoft gave them the Q3 1/4B upfront to improve the Q2 results so no infusion for the Q3; their complete current smartphone line is Osborned and sells with far smaller margins; they are investing heavily in the WP8 story; with everyone relevant lowering their credit ranking to junk and outlook as negative component suppliers will be asking for cash far sooner; some cash will go into organizing the Nokia World (fortunately, they at least decided not to play a megalomaniac this time!), they are surely already paying great amount of cash for market research and marketing campaigns preparations etc. etc. Thus, even if a profit warning doesn’t decimate them, Q3 results would bury them if they don’t offset the huge loses by selling the silverware and presenting themselves in a better shape than they really are.
Also, while Nokia Oyj is a governing body, there are some patents registered under various departments of Nokia, and with sell of those they might receive some money as well which have no other way than to be written as operational gains of a certain department. Sure, 22M especially split into parts is a miniscule amount to twist the numbers, but I guess every bit helps.
From that standpoint, I completely understand why are they selling what they can – the catch is that such move can be made only once (RIM did a similar thing a few quarters back, tho on a far lower scale) and if they don’t have something really kick-ass for the Q4 they’ll tank like RIM did past quarter. Only this time they wouldn’t be able to sustain themselves because, unlike RIM, Nokia is a far, far larger company.
Hence my remark on Elop’s gambling addict-like path – he gambled (and lost) quite a number of times before, I’m not sure if they (BoD, investors, whoever) should allow him to continue like that. Nokia is no longer a giant as it used to be so it cannot really sustain a headless fly strategy and live through it.
incognito: Now HERE is a message I just had to bookmark for the Q3 results.
Such bold predictions deserve to be checked, no matter if they are right or wrong. The worst quarter in 100+ year history of Nokia? I think we all agree Q3 will be bad, but that bad? Bold expectations there. And if Nokia tanks in Q4, they won’t be able to sustain themselves? Indeed, bold predictions. And no platform support from Microsoft in Q3? You seem certain of yourself.
We shall see.
I do agree with the acquisition risk. That is very real every single day. I also agree that if Q4 doesn’t show good trajectory upwards (I had my little 1, 2, 4, 6, 10 million quarterly expectations sequence for Lumia, something like that), Elop is very likely out – and probably should be.
Well, it certainly will be the worse in the past quite number of years, I haven’t checked the complete history of Nokia to claim that it will be the worst ever per se but I doubt they were as big as they were in the past couple of years thus I equate the worst quarter (in total loss, of course, not percentile) in the past years to the worst quarter ever.
Also, Microsoft did gave them the infusion upfront, so they might do it again but I highly doubt it (their investors won’t like it given that Microsoft is planning to spend quite serious cash for marketing of the W8 lineage etc.).
Of course, I have no crystal ball to claim to know the future, but everything points to a dreadful Q3. You might consider all that bold claims, we’ll of course see what the future will bring.
The acquisition risk is certainly the No.1 danger here, and I think it is the prime driver behind Nokia’s selling of their silverware. The trouble is, as I’ve said, that on a long run if they don’t substantially improve their position with real revenue – they won’t be able to postpone it and someone would surely grab them.
Unfortunately neither the sale of Qt or the patents is generating a whole lot of cash right now – so I suspect they are almost neither here or there for the Q3 cash position. Sure, as you said, every little bit helps.
But I suspect their significance is more (which may be also what is being rewarded by the investors with the stock price going up again a bit today) in demonstrating increased and continued focus, monetizing patents more aggressively, and cutting operating costs in the medium term.
Yeah, well if you aren’t going to adjust for inflation and size, obviously current losses are big in the scale of Nokia’s history – no matter what it is. I’m not sure how honest such a comparison would be, though. Nokia has faced some really grave times before, it would take quite a bit of research to really call something their worst quarter ever.
BTW: Could you please point out where Nokia reports Microsoft paid platform support in advance? Because the Finnish quarterly report lists these:
“Nettokassa ja muut likvidit varat kasvoivat 306 miljoonaa euroa vuoden 2012 toisella neljänneksellä vuoden 2011 vastaavaan ajanjaksoon verrattuna, mikä johtui ensisijaisesti patenttilisensseihin liittyvistä rahavirroista sisältäen 400 miljoonaa euroa ennakkomaksuja olemassaolevista patenttilisensseistä, Microsoftilta vuosineljänneksittäin vastaanotetusta alustatukimaksuista (alkoivat vuoden 2011 viimeisellä neljänneksellä) ja Siemensin Nokia Siemens Networksiin tekemästä 500 miljoonan euron pääomasijoituksesta (vastaanotettiin vuoden 2011 kolmannella neljänneksellä) ja positiivisesta liiketoiminnan nettorahavirrasta.”
Reading that, it lists four things that contributed to the cashflow:
- patent advances 400 million
- Microsoft platform support (specified as 250 million in a later paragraph)
- Siemens NSN investment
- positive operative cashflow
In English it is even more clearer:
“Year-on-year, net cash and other liquid assets increased by EUR 306 million in the second quarter 2012, primarily due to cash flows related to IPR, including a EUR 400 million receipt of pre-payments from existing IPR licenses, the receipt of quarterly platform support payments from Microsoft (which commenced in the fourth quarter 2011), a EUR 500 million equity investment in Nokia Siemens Networks by Siemens (received in the third quarter of 2011) and positive overall net cash from operating activities”
No way can you read that as the pre-payments from existing IPR licenses and receipt of Microsoft’s quarterly payment are one and counted as one.
What did I miss?
Have you been reading Ahonen again?
Here is the part where the payments are discussed sequentially:
“Sequentially, net cash and other liquid assets decreased by EUR 675 million in the second quarter 2012, primarily due to the payment of the annual dividend totaling EUR 742 million, Devices & Services operating losses, cash outflows related to restructuring and capital expenditures, partially offset by cash flows related to IPR (including a EUR 400 million receipt of pre-payments from existing IPR licenses), a positive contribution from Nokia Siemens Networks and the receipt of a USD 250 million (approximately EUR 196 million) quarterly platform support payment from Microsoft.”
Again, no mention that the existing IPR licenses would include Microsoft pre-payments.
Later on they say:
“Our agreement with Microsoft includes platform support payments from Microsoft to us as well as software royalty payments from us to Microsoft. In the second quarter 2012, we received a quarterly platform support payment of USD 250 million (approximately EUR 196 million). Under the terms of the agreement governing the platform support payments, the amount of each quarterly platform support payment is USD 250 million.”
Again, no mention of a double payment in Q2.
Where does the info come from that Nokia got an advance payment from Microsoft? I can’t see it in the quarterly report at least.
I tried Googling around and all I got was that the 400 million pre-payment was likely from Apple, which would make sense because they did the deal a year ago in Q2. An annual pre-payment from Apple. I can’t seem to find any shred of evidence to support that Microsoft pre-paid any platform support payments.
Anyone?
Extraordinary items in the balance sheet after operating profit.
The additional revenues they might get from the contract should be possible to include in other revenues and therefore under operating profit.
As a crisis company, the key measure now is cash-flow and this is positive in that sense.
this the end
Jay, I would go as far as to suggest you might want to revise the header of the story.
“Maksu tapahtuu käteisellä ja lisenssimaksuilla, joita Vringo saa patenteista.”
Translation: Nokia will continue to get licensing fees for the patents for years to come, in addition to the cash upfront for the sale. So, no, the sale price was not $22m. It’s $22m plus a revenue stream.
“Maksu tapahtuu käteisellä ___ja lisenssimaksuilla__, joita Vringo saa patenteista.”
Without knowing which patents we are talking about here, sounds perfectly reasonable to me to offload management of certain patents (a few hundred in this case out of thousands upon thousands Nokia has) to third parties, in particular IF those third parties are better at monetizing the patents than Nokia arguably has been.
^ this.
Now someone please edit the post and add Viipottaja comment above.
Well when there are resources to make extra money why not, the patents in question pays royalties if excess of 22m generated. If it doesnt then i dont think they are very essential patents. The network infrastruture have moved on from 2g 2.5g, now its LTE and future changes fast. AT&T will stop using 2 and 2.5g by 2017 followed by others.
I dont see much significant as if i have dead assets lying around making no money why not just sell them to companies who need them and through that make money rather than putting my resources in it.
Sep 5, 6 will reveal all if microsoft already bought Nokia or being sold off or its just refining their patents and new technologies patents acquired by Nokia.
I hate speculating and dont like people already bitching about Nokia. I am big fan of Nokia and whatever comes will take it in a good stride. Lets wait and see the official follow up from Nokia and also the Nokia World.
Yes i know some of them are essential patents for future tech.
Essential patents for future tech…and so they will sell? I see that makes sense. I think my iPhone will go nicely with my uni iPad. No point getting these first WP8s sans PureView anyway.
Honestly, I doubt any of us here are in a position to see/say whether selling (AND getting 35% of the licensing fees plus getting to use them for free yourself) from a particular patent, even if labelled essential and even if relevant for current and future technology, makes sense or not.
Well personal perspective on things, this was already announced during the AGM meeting that they will stream line the patent portfolios. I want to see what Nokia says regarding this selling off.
And who knows whats up their sleeves they are not selling PV or RR or any other patents that they acquired though buying of the imaging company.
Essentially they sold the monetization of the patents for a fixed fee and a revenue stream beyond that. They will still get to use the patented inventions and have a revenue stream related to the patents, but the new owner will handle the monetization of the patents. This is one way of making the patents generate income for them.
As for the wisdom in this particular transaction, I think Viipottaja put it best – I doubt any of us here are in a position to see/say whether it makes sense or not.
There is another side of that story – while they might receive one-time cash infusion and some small revenue from those in the future – they don’t control those patents anymore and can’t use them to strongarm the competition. I take it that most of those patents don’t fall under the FRAND (otherwise a patent troll wouldn’t be interested in them) so they, no matter how small, are quite a potent weapon in fighting with Apple, Samsung, HTC, Google or, why not, even Microsoft.
Most of the patents out there generate virtually no revenue but the companies keep them precisely as a weapon against hostile competition. Once you give them for monetization to a third party you might receive some cash, but you loose the ability to fight with them.
Selling of IP is usually a sign of desperation…
General points on patents of course good and agreed.
Or frugality. We all know Nokia is hurting from the transition. The reasons why are much disputed and discussed, but nobody is disputing they are hurting right now. That doesn’t mean they are desperate. It may also mean they simply taking conservative forward-looking measures to make sure things never get desperate.
But that’s the biases talking now. You see desperation where I see frugality. Neither of us really know which is true.
Just to note that Nokia has apparently made about 20 similar patent deals in the last 5 years. So, I guess, not necessarily __always__ a sign of desperation.
One could argue that Nokia wasn’t really all that well in the past 5 years, too…
Just to clarify, I’m not claiming that they did this purely out of desperation, but had they been in better state I sincerely doubt they would make such a move now when it appears that both Apple and Samsung are going to run on the market guns blazing for the final battle of mobile supremacy. In times such as this, every little patent helps, sadly I might add…
The patent system hasn’t been a driving force of innovation and betterment of the mankind for decades now – quite the opposite, it stifles technological advancement quite openly. We should revise it, or cancel the deal completely ASAP.
One could.
I would.
“why not, even Microsoft” – THAT is one interesting aspect…
Keeping this patents would strengthen Nokia’s position if they decide to break out of contract they made with M$.
E.g. BOD fires Elop due to some reason and the new CEO would decide to go with Android…
Hmmm…
yeah if no pv i will also wait, again
Nokia is taking same road IBM did.
Well, given how well IBM has been doing I guess not necessarily a bad road.
I doubt they are taking that road though.
there is no money in OEM business unless you have religion fanatics like Apple or you make everything plus components like Samsung.
Yeah, that’s why no one makes laptops for example.. oh wait..
IBM creates a lot of software. They are heavy contributors to the Linux kernel, they have their own UNIX (AIX), they run big iron.
They created and still use the POWER architecture
Nokia has none of that. Only apps on WP.
The sale of patents was already mentioned at the AGM. Timo Ihamuotila explained that Nokia had a lot of idle patents that they were not utlizing to their potential or needing – and hence they’d sell and deal with those to get something out of them. He stressed they would not be selling any patents required for a competitive edge. It is all a part of streamlining the Nokia ship and shedding excess weight in a manner that makes to most out of that (e.g. these patents, there is still a revenue deal there for Nokia if Vringo can make the patents work for them).
Obviously people will read these news one way or the other based on their bias, and I’m not disputing any views, just reporting how I feel it was explained at the AGM. You take for whatever you think its worth.
Nobody likes when their brand is stop to make things you can hold in your hand. Everyone use IBM products but nobody knows they are using IBM products.
While we certainly can agree Elop is steering Nokia into a more (but not only) service-oriented direction (location, location, location…), aren’t you guys over-reacting just a little?
Location6, location6 and location6… I am not a religious person but why on Earth anyone of us would like to give all the information for free for the US gov via MS? The devil as they mention in the bible.
Looking at the headline I was skeptical about the deal but with the 22m plus 35% cut makes for a great deal for Nokia.
Will this news provide more ammo for Mr. Ahonen?
Don’t worry, he’ll find something, and if not, he’ll just make it up.
There are 3 certainties in life: death, taxes, and Tomi Ahonen’s Nokia hate.
The 3rd one is not so certain…
He do not hate Nokia at all – he hates what happens to Nokia (just like many others) and he has strong opinion why it happens…
And most probably he has much stronger background (related to what he is speaking about) than any of us here…
this is a good thing because nokia retains the rights to use the patents for free AND also earns 35% of any royalties that vringo generates from licensing or enforcing them,
nokia is letting another company focus on licensing, patent litigations and royalties,
a smart move cause it lets nokia stay focused on phones and not tied up in endless patent trials,
and its also cheaper for nokia since it doesn’t have to hire it’s own legal team to defend those 500 patents, patent trials can last years, thats a huge cost saving,
And Nokia does not own them any more thus it can not use them for defending itself when the time comes…
uhm, no, nokia retains the rights to use those patents,
It does it when all the other ‘big guns’ are buying patents like crazy (see patents of Motorola, Nortel)…
Most probably they should have to create (and own) a company for ‘patent trolling’ if they want to keep the brand from the mud…
Please read the terms of the “sale” carefully. Nokia is entitled to a share of future revenue from this portfolio, and will retain the right to use the IP in their future products. Therefore it is very misleading to call this a sale of assets, as clearly Nokia still retains a significant degree of ownership and right of use.
This arrangement definitely sounds more like Nokia is outsourcing their royalty collection to a third party, in a manner similar to hiring a debt collection agency to extract higher debt recovery value. Nokia probably concluded that it will be costly (and a distraction) to engage in the many legal lawsuits which may be necessary to extract monetary value from the portfolio.
Stop it. Sane-talk is not wanted here.
oh boy…
so when is the location based services aspect going to split off from Nokia and become a “subsidiary”
Not likely as it has been repeatedly stated to be one corner stone of their current strategy and business plan.
In fact, Elop brought the location-based services in-house from the subsidiary that was NAVTEQ.
You guys are still failing to see the big play here, which is becoming “location’s Google” for Nokia.
By far the most bizarre thing about this announcement is Jay’s reaction to it. Nokia sells/leases 500 undisclosed patents out of their portfolio of 30000 and he tells people to go buy iPhones?
Mr. Nokia ambassador, are you feeling all right?
I was actually quite surprised by those reactions as well. I think sanity left the building a little in the analysis of this news. I guess these five or so years of Nokia transition are really getting to people. Well, who can blame them. It has been a long ride.
Constant barrage of bad or at best mediocre news regarding Nokia is starting to get frustrating, yes. But still, quite a hyperbolic outburst if you ask me.
I agree with you on that, yes.
The point is there is nothing inherently good or bad about this news, it’s just Nokia doing something they’ve been occasionally doing, for ages, with no direct effect in the next Q results.
Then you get large tech news outlets headlining again the false Q2 1 billion loss (ignoring dividends), and how $22 million is a small number compared to $1 billion (yeah no shit dumbshits), and how Nokia is doomed and this is an act of desperation.
Of course when Google releases an online-only version of the Bing Translator app, it’s the most fantastic thing since sliced cheese.
Actually, no, long tiring day. Probably more grouchy than usual.
The decision to blurt out and joke about getting a Droid or iPhone is actually something I’ve seriously considered for a while. My contract is due for renewal and I cannot justify locking myself in if said upcoming Lumias are gonna be crap (I had worries before MS unveiled WP8…though Nokia can do much more hardware wise, I’ve still got fears they’ll do the usual and mess up any opportunities they have yet again). There were other stuff going on, family wise, and I heard some more Nokia people left that made me think that they couldn’t see Nokia righting themselves with their new products – possibly more wasted opportunity from the masters of bad compromise.
It’s been such a never ending story of ‘it will get better soon’ but it seems people at the top don’t appear to be doing what it takes to actually get that done. On the surface, based on what I’d read, this didn’t make sense to me. I acknowledged my ignorance on the matter in the first paragraph.
Just give yourself a break and take a break… The Nokia road is a long and painful one, as it has been for years now. It will take us somewhere eventually, but can’t blame anyone for tiring on the way!
As for Nokia people leaving, expect that to continue over the coming weeks as they announced cut-backs are being executed. I wouldn’t read too much into that product-wise, but obviously the humane tragedy is palpable.
What a sad state of affairs, overall. But this particular patent news, forget about it, this isn’t anything bad.
What I’ve heard, the new WPs are good, if not excellent. I wish they sell.
Still, even good sales does not mean that there wont be any staff cust in the future. They are heavily over-staffed for an OEM despite the fact that networks business is labour intensive.
If WPs are only somewhat interesting until the AMAZING devices next Spring will be out, it will take true fighting spirit to get interested in constant updates location services with Ford models or how great LTE inventions NSN has made
I can easily relate to Jay’s comments. He must have met a lot of nice people from Nokia through the years and heard talks of future tech, that all is now scrapped. If you look at the sources for the blog posts nowadays, they are more from Microsoft side than Nokia’s, since there are not many left and currently and in the future, most of the new stuff will be revealed in MS events. Nokia will then show some new plastic molds, occationally new tech and some Nokia only apps.
I must say that I´m very disappointed on this news here on MNB. Especially Jay´s attitude. There´s no way to know what those patents actually are that were sold, furthermore (as stated many times), Nokia still continues to own rights and earn royalties from them. And do you honestly think that Nokia would sell some of its vital, or really, really important patents just in the need of cash and jeopardize their already shady future? I think they know better than that.
Once again, really surprised to see this kind of news here.
Actually, that is exactly what many people think of Nokia and Elop and the board. Some apparently sincerely believe Elop and the board are maliciously evil, not to mention delurioisly incompetent bunch of people with no idea what they are doing – who are giving everything to Microsoft for free, selling core patents and IP and basically just coasting until Nokia is bought and they can finally go home and rest.
Now, Nokia may get bought because the five years of “transition” have hurt them terribly, but I’m thinking that’s about the extent of sanity in that train of thought.
and the other thing is thinking that Nokia would sell life or death pantents for what it is escentially less than corporate loose change!
Some might think that the Nokia top management and board managed to save Nokia as an independet company from a hostile take-over by choosing the correct strategy.
Or some might think that what we see now has been partially a results of power struggle.
Or some might think that it is a result of lacking software know-how that has been the problem for Nokia since 2003 or so.
Or some think that everything follows pure logic and can be explained with the information publicly given.
I think there is truth in all those points. How much in each one, that is the big question.
No idea. Just a list of possible drivers
Waiting for the books…
Fanbois rationalisations are so funny.
These are are clearly marked in official press releases as “Essential patents”, meaning that they are not unused. They are part of GSM standards and are thus most certainly both widely used and licesed.
As for being old: Even 2G patents are still enforcable and again the press release mention both LTE and SAE patens being inlcuded. Those are new and essential 4G patents. The current cream of mobile standards.
They already either destroyd or sold all Microsoft independent development capability. Now they have started selling the crown jewels of intellectual property portfolio. Tranformation from a technology creator into the Dell of mobile world is finished.
Microsoft technology+Microsoft supported hardware parts from China+some marketing = Nokia
Matti:
Some of these are indeed standards essential patents, meaning their value to Nokia is only their FRAND monetization (and ability to use them). This deal helps Nokia achieve both, they can still use and benefit monetarily from the patents while someone else does the fighting for those patents. As for the rest of the sold patents, they may be something Nokia didn’t ever even plan on using, but this allows them to put those into monetization use as well instead of sitting idly by.
Now, was this wise? Neither you or I are likely in a position to really say. We don’t likely know half of what is necessary to really analyze was this a good move or not. Apparently Nokia has done 20 similar moves in the past 5 years if Viipottaja is to be believed. At the AGM it was explained they are putting idle patents to use to get more money out of them, they are not selling out stuff that is crucial – or core – to them.
Standards essential does not mean they are competitively essential to Nokia, it just means certain common (perhaps older) standards require them and their only value to Nokia was royalties – some of which this deal still guarantees to Nokia as well as a pre-payment of 22 million.
Just on the age of the patents: there is a Vringo slide to their investors say the patents are mostly from the 1990s’ and early 2000s’ (some 75 are still only applications) and that the remaining life on average is 6.7 years. Funnily (?) but logically enough they note they are strong candidates for both litigation and licensing.
http://www.sec.gov/Archives/edgar/data/1410428/000114420412043832/v320786_ex10-2x13x1.jpg
via
http://seekingalpha.com/article/794161-vringo-investors-to-fund-new-business-model
And that’s likely the point. Vringo will aggressively protect those patents, now Nokia doesn’t have to, yet still get paid for them.
you mean Vringo is a troll that will sue everyone that stands in MS’s way.
Nokia’s IP is being used as MS’s attack dog to disrupt and damage other phone makers
Nokia use to hold its patents as a defensive measure, I never expected them to stoop to this
start from burning platform memo then……………………..dont give a chances to meego and announces the death of the platform at the time of first product launch,kill symbian, knocked out from the superphone competition,closing factories,sell QT,firing hundred of employees,and now sell the patents. really amazing achievement with former microsoft employee. opinion or fact? oh yaa congratulation once again
I see sadness in MNB writers lately. The Nokia we once knew, I hope it’s gonna come back.
I love the excuse of the apologists.
By selling those patents, losing revenues can’t be avoided.
If nokia didn’t sell it, nokia will get 100% patent revenue, not 35%, if the revenue exceeds 22m.
Sure, but only if the revenue exceeds 22 million – and even then only if they fight and enforce the patents themselves. Certainly by selling the patents Nokia *can* avoid losing revenues. However, it is also possible it will gain more than it would have.
We hardly have enough info to judge whether or not this was a wise move. Some see it desperation, others as move to eke out more money from some of their aging patents. Apparently according to Viipottaja Nokia has done 20 or so such deals over the past five years.
Typo:
Certainly by selling the patents Nokia *can* avoid losing revenues. However, it is also possible it will gain more than it would have.
=>
Certainly by selling the patents Nokia *can* lose revenues. However, it is also possible it will gain more than it would have.
it is a gamble action, nokia will laugh if the buyer get 22M.
still, IMO, this step is not necessary if the financial condition is healthy.
…will laugh if the buyer get less than 22M, but will cry if get more than 22M…
well now Jolla will have access to this patents,is a hope,because nokia is just one big MS chance ,and is a small chance
They surely will have access to them and also pay the license fee.
I just can’t wait for someone to say to us, we told you so, and vice versa.
I believe they sold these patents because they wanted to sell them, period. Now move along folks, nothing to see here.
You must sell what you don’t need… GSM, WCDMA… To me it sound like important things…. well… two points… ONE: Nokia is in more troubles that they say… ot TWO: this is just a glimsep if the future Nokia… IBM I like your way???
This is huge and HORRIBLE.
Nokia has shifted patents a known troll. It will be used by MS to force Android makers to pay more extortion money for not using WP7/8.
This is a move to help stifle and kill mobile innovation. This really is a critically bad move for those who care about innovation and advancement – it’s not just Android makers that should be afraid of this.
MS cannot win on merit as seen time and time again, so they will win by legal & shady business means. Just like Windows 95 crushed OS/2 despite being inferior and left IBM screwed, now MS crushes and uses Nokia IP to screw everyone.