Nokia after Nokia: Rise of the phoenix!
Nokia’s not finished, Nokia’s device division is going out with a bang, and while most view Nokia as a device-less company once the Microsoft deal closes in Q1 2014, this post delves into the other halves of Nokia and the tricks up its sleeve.
Microsoft paid $7.2bln for the Nokia devices and services portfolio – expected to close by Q1, 2014. However the other “not so significant” parts of Nokia could provide the value up end in the next 2-5years horizon.
While Nokia hasn’t really created any splash around its Lumia range of smartphones, but it is in the process of diversifying portfolio to phablets, tablets and wearables (smartwatch). Wearables alone are expected to number 485million by 2015. However, analysts and industry mavens are betting their monies on Nokia diversifying its portfolio from phones to “any communication” device. This includes amongst others cloud operated devices, sensors and receivers powering the Internet of things.
However it is the alternate portfolio of Nokia that is particularly interesting-
1. Nokia Networks which contributes to 90% of the Nokia (minus devices and services) is a key holder of 4G patents and has been on a comeback trail with associations with Sprint, US Cellular, T Mobile working out post the Nokia takeover of the better half. Nokia Networks also has a good patent portfolio in the 5G space and is expected to be a network driver in this technology.
2. Here Maps – is possibly the unsung Hero in the Nokia portfolio. What started as acquisition of Navteq has ended up in a strong suit of solutions around Mapping- It allows Offline use, Augmented Reality wrappers and a good accuracy (compared to Apple atleast). However, it is Here Map’s telemetry portfolio that is the strongest asset – Here Maps can leverage a robust and long standing relationships with key car makers to push the solutions to driverless cars. Here maps is quite clearly a very strong alternative to Google maps.
3. Finally, Nokia has a good portfolio of patents. Nokia has allowed Samsung to continue licensing its patents for 5 years (2010-15), with a settlement amount to be determined by arbitration in 2015. Nokia will also receive additional compensation beginning in 2014. Given the number of smartphones that Samsung is selling, there is a significant windfall from this settlement that is due to Nokia. Nokia’s venture into 5G technology, self-driving cars, Graphene, and its current core holding of essential 4G patents should ensure royalty fees from many technology companies for years to come.
Bottomline – Nokia after Nokia looks to be a great series of propositions. Now then, do we expect the rise of the phoenix?