Failure to Capture Smartphone Market
Over the last couple of years, Apple, Samsung and Android have dominated the smartphone market. In spite of having conquered the mobile phone market for more than a decade, Nokia has failed to compete with the major players when it comes to developing cutting-edge smartphones. The sharp drop in sales led to the company laying off more than 10,000 of its workforce and shutting down two of its factories. Nonetheless, this does not in any way indicate that the Finish Company is about to close its doors. Unknown to most people is that Nokia is endowed by hundreds of patents. According to financial analysts, Nokia will still remain a force to reckon with in many years to come thanks to its rich source of intellectual property.
Revenue from Intellectual Property
Can Nokia’s intellectual property guarantee its survival? The true test of Nokia’s intellectual property was proven in 2009 after it filed a law suit against Apple. In the lawsuit, Nokia claimed that Apple had violated 46 of its intellectual property rights when making of iPhone. The violation included wireless standards, cameras, touchscreen controls, antennas as well as click wheels. Surprisingly, Apple consented to having infringed its intellectual property rights and agreed to an out of court settlement as well as royalties. While it is not known how much Nokia received from the settlement, it is believed that Nokia receives roughly more than $600 million per annum in profits from its intellectual property rights.
This goes on to show that mobile patents are extremely valuable assets given the increased demand for smartphones. This can be demonstrated by the number of lawsuits that market leading mobile phone makers are bringing against one another. In spite of the fact that a number of companies are being forced to wind down their operations because of increased competition from the smartphone market, intellectual property rights have attested to be nuggets. For example, when Nortel filed for bankruptcy, it is believed that its intellectual property rights were sold out for roughly $4.5 billion. In a bid to acquire the more than 10,000 patents by Motorola Mobility, Google was forced to write a check of roughly $13 billion.
Over the past 2 decades, Nokia had invested close to $100 billion in R&D. This in turn led to the Finish Company acquiring more than 30,000 intellectual property rights, 11,000 of which were filed in the United States. Consequently, while Nokia may be struggling to break through the ever competitive smartphone market, it can be assured of continued growth thanks to its intellectual property rights. Other companies that Nokia has sued for violating its intellectual property rights include Viewsonic, HTC and RIM. The lawsuits mainly revolve around 46 of its patent rights encompassing email attachments, app stores, power management and data encryption.
While Nokia may be gaining revenues through its patents, it does not alter the reality that it is no longer the number one player in the mobile phone market. According to most financial analysts, Nokia still has a significant amount of money, but a gloomy future.