Struggling Finnish phone manufacturer Nokia has decided to sell 500 wireless patents to Vringo, a New York based firm. This deal is expected to fetch Nokia $22 million. This move from Nokia is seen as a part of the corporate restructuring which it had announced in June this year. The Finnish firm is offloading some of its non-core assets to aid this plan. Nokia plans to sell 31 of its standard cellular technology patents to the New York based firm. Nokia has also included a clause that ensures the company gains a royalty bonus in case Vringo manages to generate revenue greater than $22 million using those patents. Vringo is expected to issue 9.6 million shares in order to raise sufficient funds for the patent deal.
In another deal, Nokia is selling the remainder of its Qt software business to Digia, which already acquired a portion last year. Nokia has decided to drop this open source app developer system as its primary focus is on Symbian OS, which Nokia has already dropped for Windows Phone based smartphones. Even a deal with Microsoft isn’t helping Nokia as it struggles to gain market share against power houses like Apple and Google owned Android.
However, critics still expect Nokia to emerge the victor primarily because of the Windows Phone 8 operating system, which is expected to unite the PC and the phone platform with a common interface. In an effort to achieve this feat, Nokia is planning to cut down its work force by 10,000 and downsizing its research and development centres and also selling its luxury phone unit Vertu. These moves are expected to cut costs by almost $2 billion by the end of 2013.
Critics agree to the fact that by making money and raising funds out of patents Nokia is clearly looking to develop as a unique brand, similar to a position that Apple currently enjoys today. Monetizing is huge portfolio not only generates funds but also minimizes legal risks, which is a huge bonus for a patent firm today. Nokia will have to rely on such deals until the company’s Lumia range of handsets generate enough revenue to take over a sizeable share of the market. The current estimates for Nokia share are still on the negative side, but the company has only one way to go from this stage and critics see Nokia improving in the coming quarters.
