Nokia ends smartphone licence renewal cycle with mystery deal
Seventh licensee cannot be named, says Nokia | Firm’s licensing arm expects to generate at least €1.4 billion of operating profit in 2024.
Nokia has concluded its smartphone patent licence renewal cycle, with its seventh deal in 13 months.
In an announcement made yesterday (February 8), the Finnish company said it is unable to reveal the name of the new licensee, although it did indicate that the mystery firm’s licence had “expired earlier”.
As a result of the completion of its smartphone renewals, Nokia Technologies (Nokia’s licensing business) expects “significant” catch-up payments in Q1, 2024 in excess of €400 million ($431 million), related to prior periods of non-payment.
It currently has an annual net sales run-rate (contracted recurring net sales) of approximately €1.3 billion, excluding catch-up net sales.
This is a small boost to figures released in Q4, 2023, in which Nokia Technologies pitched its annual net sales run-rate at between €0.9 and €1 billion—published before this latest deal and the one with Vivo in early February.
Nokia’s licensing business “expects significant catch-up payments in Q1 2024” and asserts that it now has long-term stability, with no major smartphone licence agreements expiring for several years.
The new deal follows three agreements already this year with Vivo, Oppo, Honor, as well as those signed with Apple and Samsung in 2023, and Huawei in December 2022.
The company has set a target run-rate of €1.4 to €1.5 billion in the mid-term, through focusing on the remaining “addressable smartphone market”, as well as growing the annual net sales run-rate through patent licensing in areas such as automotive, consumer electronics, the Internet of Things (IoT) and multimedia.
As predicted in its Q4 and full-year financial reports for 2023, Nokia Technologies expects to generate at least €1.4 billion of operating profit in 2024, including catch-up net sales.
Jenni Lukander, president of Nokia Technologies, said: “We are delighted to have successfully completed our smartphone licence renewal cycle. These seven major agreements demonstrate the strength of Nokia’s patent portfolio and the smartphone industry’s continued reliance on Nokia’s technology in their devices.
“Conclusion of our smartphone licence renewal cycle will enable us to focus on growing our licensing run-rate in new areas. We have already made significant progress in these growth areas and have a strong pipeline of future opportunities.”
