LG Smartphones To Embed Nokia Corporation (ADR) (NOK)’s Technologies And Will Pay Royalty


It is about going for what works best for you, and LG Electronics has reached out to Nokia Corporation (ADR) (NYSE:NOK) for smartphone technology. LG and Nokia have entered into a technology sharing agreement that involves royalty payments. The agreement opens room for LG to use Nokia’s mobile communication in its future smartphones. It is not clear which technologies are involved in the latest deal.

Nokia may be out of the handsets business as a manufacturer, after trading its own devices business, but the company still calls the shots in the handsets market. The company boasts a large and deep portfolio of mobile communications technology, allowing it to tap incremental revenue from licensees.

According to Nokia’s head of Technologies, Ramzi Haidamus, the company is glad to welcome LG onboard in its licensing program.

Sale of Nokia devices

LG becomes the first of the major smartphone makers to join Nokia’s licensing program after the latter gave away its handsets business. Nokia sold its devices and services unit to Microsoft Corporation (NASDAQ:MSFT) in 2014 and obtained more than $7 billion in exchange.

As it struggles with a fast-shrinking PC market, Microsoft is interested in unlocking growth in mobile. The company bets that Nokia’s handsets business will accelerate its penetration in the mobile market. Microsoft is already preparing to roll out Windows 10, which is expected to work on multiple device forms – including handsets.

Rich patent portfolio

Nokia Corporation (ADR) (NYSE:NOK) holds more than 30,000 mobile communication patents that relate to technologies such as 2G, 3G and 4G. These patents have been licensed to more than 60 companies.

Resolving differences

According to Nokia, the latest agreement with LG will set the stage for more future collaborations. The companies have also worked out ways to address their differences, which will happen through an independent arbitrator.

It is currently unclear the royalty rates Nokia Corporation (ADR) (NYSE:NOK) and LG have agreed to in the latest technology sharing deal.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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