JPMorgan reinstates Nokia Corp (NYSE: NOK) at Overweight and price target of €8 ($10.80).
Analyst Sandeep Deshpande noted the substantial potential Nokia has to monetize its patent portfolio. He thinks that if Nokia were able to take in 1 percent royalty per device, the firm's price target would easily move to €15.
Deshpande commented, “Nokia has a broad patent portfolio (ex NSN) of ~10k patent families comprising ~30k patents. Only ~10% of the patents are externally licensed & Nokia has built a large trove of implementation patents which are linked to its essential patents.”
There is two key ways Nokia can fully monetize its patents:1.Getting better terms on new licensing deals given that Nokia has a stronger share of LTE patents versus 3G; and
2.Broader licensing and enforcement of non-essential patents.
There might also be opportunity for Nokia in unraveling cross-licensing agreements. Say Nokia licensed certain IP to Apple and doesn't need that access any more, it would be able to sell that patent in whole.
Nokia also recent won an injunction against handset maker HTC. Deshpande sees two points in this segment:1.Qualcomm's (Nasdaq: QCOM) LTE chips contain Nokia IP; and
2.While Qualcomm is a licensee, the right does not pass through to its customers. HTC would need to obtain its own license with Nokia.
Deshpande comments, “Qualcomm sells over 700 million
of these chips every year and once this case precedent has been set, Nokia can use it to claim royalties on that IP from many other infringing companies. The results of the key Samsung arbitration re additional payments will be known in early 2015 as well which should be a catalyst.”
The cash is real enough, Nokia needs to start outlining its future, no excuse to keeping silent now when Msft has already announced its leadership spots....even elop has got his EVP at msft...nokia needs to step up to the plate, 7months of nothing is getting ridiculous
aside from FRAND SEP IP's interesting to note that Nokia has barely begun monetizing its non-SEP, chiefly with Apple in 2011 and last month with HTC. non-SEP's potential is huge, esp against Samsung and other android OEM...then there's the mapping IPs against Google itself...its going to be a good year.
since this analysis, we've had the HTC IP settlement...proof of effectiveness of Nokia's IPR...now that there are no conditions imposed on Nokia by the Chinese...I think conservatively....we are going to fly.
Nokia should be tracking Msft not the the biotechs..that makes no sense at all.
Nokia is fundamentally a value investment.
The revaluation coming out of expected BK valuations last year on surprise purchase by Msft...
New Nokia is fundamentally a different company after deal closes with the drag from devices gone.
looks like this analysis is back in force. No conditions imposed on Nokia by China, as is appropriate given that Nokia is the divesting company. Very very good news; now we know reason for delay was b/c of msft negotiating the extensive IP conditions imposed on it...not on nokia!!