The stock of Nokia (NYSE:NOK) closed at $4.78 losing 0.21% in yesterday’s trading session. Huawei has over the years been an arch rival of Nokia in the networks business and the most recent development was the signing into a multi-year smartphone patent license deal. From now moving forward, China’s Huawei will be performing much better considering the fact that it was able to enter royalty agreements with some of the topmost handset makers around the globe.
It was on Thursday when the Finnish company made a statements disclosing that it was going to start booking revenue and that would include a one-off catch-up payment from the fourth quarter. A number of news reporters moved out in a bid to get the two companies to reveal more details regarding the financial details in line with the agreement. Their requests were turned down after the companies declined to comment.
Nokia’s patent catalog is all about the sort of technology that keeps the need for hardware components in a handset at a minimum, increasing reception and above all conserving battery life. Quite a significant percentage of Nokia’s revenue emanates from telecoms network equipment.
Mikael Rautanen, an analyst working with research firm Inderes which sources indicate has a ‘buy’ rating on the stock opined, “It’s a significant deal because Nokia now has agreements with all the big phonemakers… The network market will remain tough, but the growing patent revenue will compensate for it.”
One outstanding aspect about these two companies is the fact that they have been longstanding rivals in the in the global telecoms equipment market. A decade down the line Nokia stood out as the largest cellphone maker around the globe. In 2014, it was compelled to make the tough decision of withdrawing from the handset market. However, it has upheld its position as a major licensor of wireless technology and it is also an enormous suppler of fixed-line network gear and mobile.
On the other hand Huawei has risen to become the largest maker of telecoms equipment and that is on the basis of revenue collection.
