Finnish handset manufacturer
), has sold 125 of its patents to intellectual property (IP)
investment and advisory firm, Pendrell Corporation. However, none
of the firms disclosed any financial details of the deal.
Most of the assets that Nokia has sold include patents for SD
cards, embedded flash, flash storage and other memory
technologies that are used in a wide variety of electronic
devices. Among the 125 patents, 81 have been described as
essential for application standards by the Finnish handset
Per the deal, Pendrell has created a subsidiary known as
Helsinki Memory Technologies (HMT), solely to manage the new IP
patents. HMT will work on the technological initiatives
undertaken by Nokia and will provide the handset manufacturer
with a license for every patent passed to HMT.
Nokia has the strongest patent portfolio in the wireless
industry and has spent almost $62 billion in research and
development in the last two decades. The company has become a
pioneer in the development of portable and embedded memory
technologies. Nokia's memory technologies are used in 8,000
different consumer electronic devices used by more than 400
Nokia has been fighting market share loss against rival
) iPhone and a gamut of other smartphone manufacturers who are
) Android platform. In a bid to beat this difficult situation the
company is trimming its work force by 10,000, downsizing its
research and development unit and offloading its non-core
We believe that selling these technological assets will
provide a win-win situation for Nokia, as it will profit from
Prendell's expertise in IP strategy and licensing and at the same
time reap benefit from its huge investment made in research and
The combined market for these memory technologies is expected
to touch $12 billion by the end of 2013, which could somewhat
reduce Nokia's royalty revenues from licensing its IP
Nokia currently carries a Zacks Rank #3 (Hold).
Other Stocks to Consider
Other Stock to consider in the OEM industry is
), which currently carries a Zacks Rank #2 (Buy).
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