17th jan, 2012

Nokia patent sale is cost cutting not increasing revenue

A lot of media reports that Nokia has sold 450 of their patents to Italian licensing company Sisvel. Even though Danish Computerworld goes as far as claiming that it is one 6th of the Nokia portfolio (closer to one percent) and the rest of the reports claim that the sale is a big thing the fact is that this is a very small deal.
Looking at the press release it is obvious that the numbers are misinterpreted. Yes the deal concerns 450 patents, but only in 47 patent families. This means that the deal is about 47 inventions and not 450.
But…It is interesting that Nokia is selling off technology that is not essential to keep in-house. Nokia retains licensing rights to the patents. What Sisvel gains is an opportunity to further license those patents. How big the financial gains for Nokia remains to be seen. Nokia cuts IP costs but whether the licensing agreement gives the company billions is doubtful. I see the deal as cost cutting more than increasing revenue.

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