In the aftermath of the court verdict last week, favouring Apple Inc.(NASDAQ:AAPL)) and holding Samsung guilty of violating patents, there has been a re-rating of the other companies in this sector. There has been speculation over who would emerge as a contender or a winner in the fast-growing smartphone market.
Nokia Corporation (ADR)(NYSE:NOK) shares showed the most spectacular rally as an immediate reaction to the verdict.
Compared to many of the others the Finnish handset maker is sitting in the most advantageous position that this opportunity offers.
For one, unlike many of the others Nokia does not have too many legal battles over patents weighing it down. Over its long history, the company has never been accused of copying other manufacturer's designs.
Second, it has one of the most valuable patent portfolios in the ecosystem, having spent the last 20 years, spending $50 billion in acquiring about 30,000 patents. There are around 40 companies globally, including Apple, who pay it license fees. These bring it annual revenues of about a billion dollars.
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Third, it's to move with partner with Microsoft for its mobile operating software, on hindsight is rather intelligent. The world's largest software company has monetary resources and the marketing muscle to market the phones that it will launch in partnership with Nokia.
Unlike Google's Android, on which Samsung is heavily reliant for its success, Microsoft's Windows 8 is free of any legal encumbrances and there is no fear of product cancellations.
Fourth, Microsoft and Apple have cross-licensing agreements and there i very little likelihood of the two companies suing each other over patents - at least in the near future.
At this juncture, Nokia has more going for it than most other companies and investors need have no fear while including it in their portfolio.