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.
Can NOK Find The Bottom and Bounce Back? Find Out Here
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.
After all the downgrades by Goldman and S&P, I believe these companies will do their best in doing wrong to prove their are right! So, big fluctuations in SP, without any justifiable reason might occur in the near future.
ReplyDeleteIMVHO - The ones who already have it, should hold tightly.. the ones who dont should buy it!
The world needs a third player to compete with an one American and one Asian company in the mobile sector!