Last week, Telecoms network equipment maker, Nokia & Xiaomi Technology (a smartphone maker) signed a patent licensing agreement.
The financial details of the agreement were not provided, saying it includes a cross license to each company’s cellular standard. Network infrastructure equipment will also be provided to Xiaomi by Nokia.
In a statement, Nokia Chief Executive Rajev Suri said, “Xiaomi is one the old world’s leading smartphone manufacturers and they are delighted to have reached an agreement with them”.
OP Equitre analyst Hannu Rauhala said, “Financially, I don’t think it’s very substantial for Nokia. But it’s a good head start to negotiations with other Chinese manufacturers”.
Royalties from patents stand for silver on Nokia’s overall revenue, 90% + of which comes from telecoms network equipment. But licensing payments are highly profitable and the network business is suffering an industry-wide slump.
Nokia’s patent catalog was built when the company dominated the mobile handset business. It covers technology that reduces the need for hardware components in a phone, preserves battery life and increases radio reception, among other features.