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A Meaningful Change at Nokia Technologies

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Dispute with Apple

The recent change in leadership at Nokia’s (NOK) patent and licensing division is loaded with meaning. Nokia tapped Gregory Lee in June to be the chief executive of Nokia Technologies—the unit that develops and licenses intellectual property. Lee joined Nokia from Samsung (SSNLF), where he had worked for 13 years. His last job with Samsung was as head of the company’s North American unit.

Nokia Technologies mainly focuses on innovations. It monetizes the intellectual assets it develops through patent licensing. So it was Nokia Technologies that was behind Nokia’s recent patent dispute with Apple (AAPL). The companies have since settled their differences.

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Nokia’s saving grace

As Nokia continues to struggle to drive growth in its core networks unit, as you can see from the revenue growth chart above, Nokia Technologies is viewed as a potential saving grace. Nokia Technologies sits on a portfolio of innovations that are relevant for production of a wide range of mobile and other electronic devices.

Some experts view the hiring of Lee to head Nokia Technologies as a revealing move, considering his exposure and experience with Samsung. Samsung is a global leader in the consumer and professional electronics business.

As such, the knowledge Lee brings could help Nokia boost its patent revenues. Plus, Lee seems to be a fit for Nokia’s push into the digital health and digital media markets.

Slowdown in carrier network upgrade

Nokia is missing robust growth in its networks division because of a slowdown in its carrier network upgrade, considering that many major network operators have completed their transition to 4G LTE networks. Moreover, a slowdown in Nokia’s networks business can also be linked to market competition, especially competitive pressure from Cisco (CSCO) and Ericsson (ERIC).

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