Nokia Loses on Sales But Gains From Apple Licensing

Nokia had a stronghold on the mobile phone marketplace for more than 14 years but Apple has wiped that record out by taking over in sales. However, even though the Finnish company made a loss last year of an astonishing $1.7bn the firm is set to make $600 million from Apple in the latest licensing of patents.

So it seems that even though the Lumia range has disappointing handset sales figures of just a few million, the company are making more money from Apple from the license deals. With a recent shift in management, Nokia are looking set to plough more money into the Lumia range with the latest being the 900 and the 800’s sales are starting to pick up this year compared to last year. However, with the license deals that are in place and the revenue generated the firm are surely better off stopping making handsets altogether and change the company’s business model?

After that $1.7bn loss on handsets, there was a 20 million drop in unit sales or 24% which saw the firm look internally at how to change things for the better. The previous CEO has now stepped down as boss and there has been a rejig in the camp. With $600 million being clawed back from Apple and if the profits don’t start to climb again the firm could start legal proceedings with other smartphone makers to generate some more revenue. However, there is only so long that Nokia could do this for before the makers would simply stop using the patented products or designs and invest in doing it themselves.

There are talks that Nokia will try and regain some revenue by selling off the patent portfolio to another smartphone maker, most probably Apple, to become more elastic in its business ventures, but Microsoft are hot favourites to snap up the deal. As Google paid more than $12 billion for Motorola Mobility last year and Nokia are in a similar situation to that, we could see the Finnish company sell up and move on.

However, with all of this talk of selling that doesn’t mean that Nokia will stop making smartphones as the new Lumia 900 has been accepted with high regard since its launch and demand is very high. It seems the keenly priced and frankly technologically outstanding device is causing waves with people that find Samsungs or iPhones to popular. There is a market for smartphones for people that want something a little different to everyone else, but with more than 5 million Samsung handsets being sold every month it’s hard to argue with those sales figures.

As Nokia has binned Symbian and taken on the Windows Phone operating system with gusto it seems there could be another wave of activity for the firm. Many people believe that the operating systems such as Android and iOS are much more advanced but Windows has a great reputation for delivering mainstream systems for many years and it could well be the key for Nokia’s comeback fight.