Nokia licensing patents to Samsung
The executive who oversees Nokia’s (NOK) patent licensing business, which falls under its Nokia Technologies segment, is leaving the company. Ilkka Rahnasto is leaving his role as Nokia’s patent chief at a time when Nokia has reached patent licensing agreements with all of the world’s top handset makers, including Samsung (SSNLF), Xiaomi, Apple, Huawei, and LG Electronics.
Samsung shipped 72.3 million smartphones in the second quarter and captured 19.3% of the global market, according to Gartner. Huawei shipped 49.8 million smartphones, and Apple shipped 44.7 million smartphones in the quarter, rounding out the list of the world’s top three smartphone companies.
Companies set royalty rates for 5G phones
Nokia is one of the companies vying to license 5G technology to the makers of 5G phones. The company expects to charge as much as $3.5 in patent royalties for every 5G phone that applies its patents. Ericsson (ERIC) and Qualcomm (QCOM) are looking to charge as much as $5.0 and $16.25, respectively, in royalties for every 5G phone that utilizes their patents.
According to Qualcomm, a leading supplier of the components used in smartphones, 5G-enabled consumer smartphones will start arriving in early 2019. LG Electronics, one of the handset makers that have signed up to license Nokia’s patents, is working with US mobile network operator Sprint (S) to build what Sprint has described as an outstanding 5G phone.
Most profitable Nokia segment
Nokia Technologies, the segment that houses Nokia’s patent licensing business, is Nokia’s most profitable arm. The segment generated ~$418.9 million in revenue and $338.8 million in operating profit in the second quarter, accounting for 87.4% of Nokia’s overall operating profit in the period.