Nokia is first and foremost a phone manufacturer — with Microsoft’s announcement that it is buying the devices group of Nokia, what else is left of the Finnish company?
The answer: its technologies.
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Nokia says it will focus on its three “established businesses” after it sells its devices and services business to Microsoft — namely NSN, HERE, its CTO office and its patent portfolio.
The NSN business deals with network infrastructure and services, particularly mobile broadband, and works on LTE services as well as future technologies. HERE concerns mapping and location services across different screens and operating systems, while the Advanced Technologies business will build on several of Nokia’s current CTO and IP activities.
Microsoft may be acquiring the devices business and taking over its Qualcomm and other key IP licenses, but it is only licensing Nokia’s patents for use across all Microsoft products and licensing the ability to use the HERE mapping capabilities broadly, so Nokia gets to continue being the owner of these patents and mapping technology.
The joint agreement notes that Nokia will retain its patent portfolio and grant Microsoft a 10-year license to its patents at the time of the transaction closing, while Microsoft will grant Nokia reciprocal rights to use Microsoft patents in its HERE services. In addition, Microsoft will separately pay Nokia for a four-year license to use HERE technologies.
Nokia will continue to own and manage the Nokia brand. Microsoft is acquiring the Lumia brand and products, Nokia’s Mobile Phones business unit, the Asha brand and will license the Nokia brand for use with current Nokia mobile phone products.
In essence, after the transaction is closed, Nokia will be transformed into a technology and IP licensing company and shed its manufacturer role. Microsoft will take over the baton and become the OEM for its own Windows Phone devices.
Image Credit: Stefan Puchner via AFP/Getty Images