Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s hefty patent portfolio provides big opportunities for growth, according to analysts at JPMorgan Caznove. Analyst Sandeep Deshpande and his team spoke with Paul Melin, Nokia’s intellectual property head. They came away with a better understanding of the new division and issued a report to investors this week.
Nokia to shift patents goal
The analysts said that in the past, Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) had run its intellectual property business to protect its devise and services business. The division was also aimed at cutting down on outgoing royalties. The majority of the company’s patent portfolio has not been externally licensed. Also there are some cross licensing deals which would provide potential growth.
They said the division will be shifting its focus to royalty revenue instead of protecting the company’s devices and services division. As a result, they believe investors should look at Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s new business as a growth opportunity instead of as an annuity, like some see it.
Patent opportunities for Nokia
According to Melin, only about 10 percent of Nokia’s patent portfolio is actually licensed. Most of the licenses are for the standard essential patents, which the company is required to license under the Fair, Reasonable and Non-discriminatory terms of the technology industry. The other patents are being used only for Nokia’s devices business. After the company completes the planned sale of its devices division to Microsoft Corporation (NASDAQ:MSFT), it will consider actively licensing those patents, which would provide a significant opportunity for revenue growth, according to JPMorgan Cazenove analysts.
They note that without Nokia Siemens Networks, which it is in the process of acquiring the rest of, Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) has about 10,000 patent families. In all, the company holds about 30,000 patents. Melin told them that the company has been filing about a thousand patent applications every year.
After the sale of the devices, business, the analysts said Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s intellectual property office could have enough resources and skills to develop new intellectual property, including new standards essential intellectual property. They note that Nokia Siemens Networks also has a comprehensive LTE patent portfolio. Also Nokia’s Here mapping division generates some patents as well.