The end of an era looms, when Nokia‘s devices business finally transfers to Microsoft, possibly within the next few weeks. There are already clear indications of what the remaining Nokia company will look like. Of course the NSN infrastructure arm will be the largest activity, and the Here mapping company probably the fastest growing. However, the more shadowy third arm – the Advanced Technology unit which will house patents and R&D – is also starting to show its hand, with hints about moves into wearables and other hot areas, as well as a more aggressive stance on IPR.
Nokia‘s tit-for-tat series of lawsuits with HTC demonstrate an increased focus on leveraging the firm‘s massive patent base more actively to generate revenue and influence. It also has suits against BlackBerry and ViewSonic, and it may become more aggressive once it completes the sale of its devices business to Microsoft. Although the Windows giant will gain licences to many Nokia patents, most remain with the Finnish firm and will be part of a fairly autonomous licensing and R&D unit. This will no longer be constrained by the need for a handset maker to engage in cross-licensing deals, and is likely to seek higher revenues than Nokia has secured in the past from its IPR.
Patents currently make around €500 million ($677.8 million) a year for Nokia, but it wants to increase that sum significantly. Of course, if IPR is not tied to its own current or future products, the company will have to stay on the right side of becoming a patent troll. Europe‘s competition commissioner, Joaquin Almunia, said recently: “Since Nokia will retain its patent portfolio, some have claimed that the sale of the unit would give the company the incentive to extract higher returns from this portfolio... If Nokia were to take illegal advantage of its patents in the future, we will open an antitrust case — but I sincerely hope we will not have to.”
Nokia CTO Henry Tirri rejected such a possibility, pointing to the heavy R&D requirements of NSN. He said in an interview with ZDnet that just milking the existing portfolio was “not a very sustainable, or a very wise, business. Yes, we have a young patent portfolio, so for [the] next 10 years, we can utilize two-thirds of patents, but still, it's not a sustainable business. I don't envision us buying patents and then selling them.”
Licensing of technologies, rather than just patents, is a more likely course for Advanced Technologies to take if it develops in areas which Nokia decides not to commercialize directly, and Tirri is keen to be seen as an IPR firm, rather than ARM, rather than a troll. But much of the work of his group will still be focused on areas where Nokia is active. Under the terms of its deal with Microsoft, Nokia will not be able to make handsets again for at least two years, but it may not move away entirely from devices, with hints that it could start to develop products for the internet of things, made even more voguish by Google‘s highly valued acquisition of Nest.