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Technology Stocks : Nokia (NOK) -- Ignore unavailable to you. Want to Upgrade?

To: niceguy767 who wrote (34652)	9/4/2013 12:25:00 PM
From: sylvester80	Respond to of 34857

Microsoft And Nokia's Plan To Shake Down Android Device Manufacturers Microsoft shrewdly opted not to buy Nokia's mobile patents, thereby enabling another massive patent troll to prey on Android. readwrite.com Matt Asay September 04, 2013 MOBILE While much of the talk surrounding Microsoft's acquisition of Nokia's mobile business surrounds the inevitability of end-to-end mobile business models, there's a vastly different lesson to take from Microsoft's acquisition. Along with Nokia's mobile business Microsoft got a 10-year license to a massive treasure trove of mobile patents. The real money, however, isn't in Microsoft delving deeper into Android patent royalties. Rather, it's in letting Nokia do it. The Money Is In AndroidLet's do the math on Microsoft's mobile strategy going forward. Last quarter, Nokia shipped 7.1 million Windows-based smartphones, on which Microsoft made less than $10 per device. That's $71 million. Not bad, right? Wrong. At least, by comparison with how much Microsoft makes from Android. By some estimates, Microsoft collects as much as $8 per Android device. Lower, but since current shipping volumes of Android phones are so much higher than that of Windows Phone devices, that means Microsoft could generate $4.3 billion in Android royalties in 2013, and $8.8 billion by 2017. That's real money. And while Microsoft has indulged in wishful thinking that with combined "synergies" it could generate $40 per Nokia device, that's still small compared to its near-term potential to FUD Android distributors into license agreements. Last quarter Microsoft's hypohetical enhanced margin would have yielded $284 million gross, or an annual run rate of $1.1 billion. To get to this hypothetical synergistic figure, Microsoft actually has to sell something, which requires real work. To mint $4.3 billion from Android licenses? It just needs to send out lawyers. Shaking The Android Tree HarderIt may be about to get worse. While Microsoft talked up Nokia's device distribution, sales networks and other benefits, it was quick to call out the "valuable patent benefits" it derives from the deal. Microsoft walks through the cost benefits it receives from additional patent rights with Qualcomm and others that it receives through the deal: Given that Microsoft got licenses to use Nokia's patents, and not the patents themselves, Microsoft likely saw the patents as a way to hedge against would-be litigants and lower its own IP costs associated with Windows phones. But Nokia? Well, that's different. Nokia has not historically licensed its patents, preferring instead to use them to defend against competitors. With the sale of its handset business, however, all bets are off, as Nokia spokesperson Mark Durrant acknowledged: "Once we no longer have our own mobile devices business, following the close of the (Microsoft) transaction, we would be able to explore licensing some of those technologies." Microsoft has intimated that 80% of Android phones are covered by Microsoft's patent royalty agreements. Buying Nokia's patents outright may have given Microsoft an even stronger hand in convincing Android manufacturers to cough up patent royalties, but having Nokia do the same is even better. Microsoft has effectively imposed double taxation on Android licensees, all the while shifting the dirty work to Nokia. The Mobile Patent Morass Just Got WorseMicrosoft may have just enabled a mega patent troll. Nokia no longer has any skin in the mobile game beyond its hugely valuable patents. Given Microsoft's success in shaking down Android licensees, odds are good that we'll soon see Nokia follow suit. Rest assured that in all this patent posturing not one shred of customer value will be created, but plenty may well be destroyed, and Android phones will become even more costly and less profitable to produce. Exactly as Microsoft has long planned with Linux servers and now Android phones.

To: niceguy767 who wrote (34652)	9/4/2013 12:37:22 PM
From: sylvester80	Read Replies (1) \| Respond to of 34857

It is very likely that the NEW Nokia will make in 2014, 100x the profits from their patents with royalties, than they would have made if they held on to POS D&S. I also would like to know who will be getting the yearly $0.5 BILLION royalties, with 100% margins mind you, from Apple? Nokia or Microsoft? Cause they way I read it, I think it is Nokia. They passed to them the royalties from IBM and Motorola licenses (which are garbage), but they did not mention Apple. If Apple royalties still end up at Nokia, and I think they are, then this NEW Nokia is hugely undervalued. We could be looking at massive earnings in 2014.