Tuesday, March 8, 2011

Nokia (NOK), Microsoft (MSFT), $1 Billion and Patents

In what could become in the years ahead one of the most underestimated and important deals in the smartphone sector, Nokia (NYSE:NOK) will reportedly get over $1 billion from Microsoft (NASDAQ:MSFT) to work with the mobile giant.

One of the vastly overlooked elements of the deal concerning Microsoft will be its apparent access to the strong patent portfolio held by Nokia.

Interestingly, the five-year deal has officially to be signed yet, but that will happen before Microsoft starts transferring its first part of the hefty payment to Nokia, but before an actual product comes to market.

On Nokia's part, it'll pay a licensing fee to Microsoft for each handset sold with Windows Phone 7 in it.

As for the patents held by Nokia, they are a tool that could be used in legal maneuvers against competitors, which is increasingly becoming a large part of the industry. Nokia is already targeting Apple (NASDAQ:AAPL).

No comments: