Nokia And Blackberry Maker RIM Sign License Agreement
Michael Harper for redOrbit.com – Your Universe Online
As the old saying goes, sometimes “stuff” rolls downhill. For instance, RIM’s dismally poor sales and rapidly decreasing subscriber base isn’t only hurting them, it’s also hurting the companies they have to pay in order to conduct business. Last month, a Swedish arbitrator ruled that RIM was no longer entitled to sell smartphones or tablets which can connect to a Wi-Fi network (read: all of their devices) without first paying royalties to Nokia for the use of their associated patents.
Nokia then announced that they would use this ruling to take RIM to court in Britain, Canada and the U.S. Nokia has also been fighting through their own period of downturn lately and has decided to lean upon their expansive patent portfolio to help keep the company afloat amidst slumping sales of their latest handset.
Today Nokia announced that they were able to work out a licensing agreement with RIM, earning the Finnish company some extra cash to fill their coffers as well as the promise of on-going licensing fees. Though the specific terms have not been disclosed, it’s likely Nokia could be receiving a larger paycheck from their Canadian competitors if only they were able to ship more devices.
Recent numbers reveal that RIM’s long-standing nosedive shows no signs of stopping, however, the company recently announced that they’ve lost as many as 1 million subscribers in the last three months. RIM also announced a $9 million loss during the last quarter, a number which doesn’t include the one-time payment they’ll have to make to Nokia sometime this quarter. Though Nokia ended up in a position of power following this battle, the wireless phone maker isn’t faring much better these days.
Sales of Nokia phones have been weak while their cash reserves continue to dwindle. In October, the company announced a $990 million bond to add fuel to their comeback fire.
Nokia and RIM may have settled this patent dispute, but the Finnish company also has ongoing court disputes with HTC and Viewsonic. Nokia initiated legal actions against each of these companies this May, and with RIM now settled, it’s expected that HTC and Viewsonic will soon follow.
Nokia’s chief intellectual property officer Paul Melin was understandably pleased with this new agreement, saying in a statement: “This agreement demonstrates Nokia’s industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market.”
This new license with RIM will add to Nokia’s already strong $660 million business of licensing their patents to other mobile phone makers. As usual, analysts are also weighing in on the matter, saying that if Nokia lands the right negotiations, they could end up earning hundreds of millions more each year by simply licensing out their patents.
For instance, RIM settled with Apple last summer in an agreement which earned Nokia another sum in the hundreds of millions of dollars range. As Apple sales remain strong and show no signs of slowing down anytime soon, this agreement is seen as a profitable one for Nokia.
And while Nokia is in no position to begin turning down license agreements, it’s likely RIM’s new agreement is incredibly less valuable to Apple’s, with an ever quickening shelf-life.