With the Nokia deal, Microsoft become a juggernaut in patents for smart devices
We’re still going through all the details of the recently announced Nokia acquisition by Microsoft and are getting a clearer understanding of all the implications of the transaction. Needless to say, Microsoft is going to come out ahead of this deal and it will be something for its competitors to take note in the morning.
The biggest impact is of course Nokia’s favored patent portfolio, which was already wielded as a weapon against their Android rivals in addition to Microsoft’s treasure trove of license agreements. But just as interesting, Microsoft sees the deal with Nokia as boon for its OEM business and they are expecting the acquisition to help with OEM opportunity.
That’s right, as far as we can tell, Microsoft owning Nokia does not mean Samsung or HTC are getting the boot for Windows Phone devices, though it obviously remains to be seen how each company will respond.
The facts and numbers themselves are quite revealing and we’ll list them below for you to ponder:
- The Microsoft-Nokia deal comes well before 2014 recommitment date
- Acquisition grows OEM opportunity; Continue existing partnerships
- Microsoft will use offshore cash with no impact on ability to reduce capital to shareholders
- Option to convert 10 year license to a perpetual license
- Microsoft is acquiring over 8,500 design patents; ownership of Lumia and Asha brands
- Microsoft is acquiring more than 60 patents with third parties e.g. Qualcomm
- Microsoft is licensing 30,000 utility patents and patent applications
- 10 year license to use Nokia brand on feature phones
- Microsoft will have the most cost-effective patent arrangements for smart devices, including deals with: Samsung, Qualcomm, IBM, Motorola Mobility, Motorola Solutions, LG, Nortel, and Kodak
- Phone device R&D remains centered in Finland
- Nokia sales team intact
- Acquisition approval in EU, US, China, India, Brazil, Russia, Canada and others
In essence, Microsoft is getting a whole lot for the $7.1 billion dollar purchase. With a streamlined production process, access to Nokia’s rich portfolio of patents and combined with Microsoft’s market might, this new formation should rival Apple and Samsung—and that’s exactly Microsoft’s goal.
Of course the counter argument would be that Microsoft was already getting a lot of that with the previous Nokia agreement. But this purchase guarantees that Nokia won't slip out of their hands--in layman terms, Nokia became too valuable for Microsoft to gamble over.
Source: Microsoft Slide Deck
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Daniel Rubino is the Editor-in-chief of Windows Central, head reviewer, podcast co-host, and analyst. He has been covering Microsoft since 2007 when this site was called WMExperts (and later Windows Phone Central). His interests include Windows, laptops, next-gen computing, and for some reason, watches. Before all this tech stuff, he worked on a Ph.D. in linguistics, watched people sleep (for medical purposes!), and ran the projectors at movie theaters because it was fun.
Its good for WP as it means that MS is searious... but i still feel not searious enough...
take 900 million write-off for Surface as an example... Botched xBox One launch is another..
apart from xbox 360, they have not been successful in any consumer products... EVen 360 had its moments.. RROD..
First time since we used lumia's that people outside gadget enthsiasts notice.
Microsoft is acquiring 30,000 utility patents and patent applications
Microsoft is actually *licensing* those utility patents.
Daniel, if you happen to read this - please correct the above.
die MS die
Regarding your queries, I am only guessing but probably the Priority Stores will remain with minimal changes in name. The Asha line will continue to be called Nokia Asha or Asha by Nokia, for the next 10 years atleast. I am hoping MS does not rename the Lumia series to Microsoft Lumia, with will probably go ahead as simply Lumia (I hope so).
Another factor that you havent still considered, but I have, is that with such a detailed sale and services network already established in India, MS will probaly finally release the Surface line for Tablets/Ultrabooks here.
Also, recent news of Windows Phone 8 and Windows RT merging.
And the 6' Nokia "Bandit" phone that's been supposedly leaked recently.
NOW, does anyone else feel like there's a Surface-esque type phone that will feature Windows 8/RT capabilities, in a phone factor? I mean, it only all adds up at this point.
If Microsoft/Nokia releases a phone with a nice 4.5 - 6 Inch display, quad-core processor, multiple gigs of RAM, a 1080P screen, a killer Nokia camera and the ability to not only RUN Windows, but also the power to process actual windows-based programs. Just imagine for a second the possibilities.
According to the official statement from Nokia: Nokia will licence its patents and they will remain within the Nokia Group. Basically the headlines of the news this morning got it wrong. What is really sold is only D&S, the rest including patents will only be licenced. Nokia's CTO (Chief Technology Office) organization and patent portfolio will remain within the Nokia Group. - See more at: http://press.nokia.com/2013/09/03/nokia-to-sell-devices-services-busines...
I will be more interested in checking when they can get us a good phone real innovative one which takes over samsung galaxy s4 and likes of iphone...
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