{"id":21865,"date":"2011-06-22T09:00:36","date_gmt":"2011-06-22T13:00:36","guid":{"rendered":"http:\/\/www.investmentu.com\/?p=21093"},"modified":"2011-06-22T09:00:36","modified_gmt":"2011-06-22T13:00:36","slug":"did-nokia-win-the-battle-against-apple-but-lose-the-war","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/06\/22\/did-nokia-win-the-battle-against-apple-but-lose-the-war\/","title":{"rendered":"Did Nokia Win the Battle Against Apple, But Lose the War?"},"content":{"rendered":"<p><a class=\"post_title\" href=\"http:\/\/www.investmentu.com\/2011\/June\/nokia-vs-apple.html\">Did Nokia Win the Battle Against Apple, But Lose the War?<\/a><\/p>\n<p>by <a href=\"http:\/\/www.investmentu.com\/investment-experts\/tony-daltorio.html\" >Tony D&#8217;Altorio<\/a>, <em>Investment U<\/em> Research<br \/>\nWednesday, June 22, 2011<\/p>\n<p>A long-running dispute between two mobile phone giants &#8211; <strong>Nokia <\/strong>(NYSE: <a href=\"http:\/\/www.google.com\/finance?q=NYSE:NOK\" >NOK<\/a>) and <strong>Apple <\/strong>(Nasdaq: <a href=\"http:\/\/www.google.com\/finance?q=NASDAQ:AAPL\" >AAPL<\/a>)  &#8211; is over.<\/p>\n<p>During the battle, each company had accused the other of  stealing smartphone technology and infringing on patents.<\/p>\n<p>But both companies reached a settlement last week. Apple  will pay Nokia a one-time amount, estimated between $300 million and $600  million, to cover the 111 million iPhones sold since it came to market in 2007.  Apple will also provide ongoing royalty payments for Nokia technology, which  could easily be worth several hundred million dollars more.<\/p>\n<p>This legal victory is important for Nokia&#8230;<\/p>\n<ul>\n<li>It provides the  company with much-needed cash. The settlement will support Nokia during a  tumultuous period as it faces rapidly declining market share and stiff  competition from Apple&#8217;s iPhone and phones powered by Android, the operating  system from <strong>Google <\/strong>(Nasdaq: <a href=\"http:\/\/www.google.com\/finance?q=NASDAQ:GOOG\" >GOOG<\/a>).<\/li>\n<\/ul>\n<ul>\n<li>The victory also pointed out that Nokia does have an  industry-leading patent portfolio in smartphone technology: A key reason  takeover rumors continue to swirl around the company.<\/li>\n<\/ul>\n<ul>\n<li>It also opens the door for more revenue opportunities for  the company, including possible licensing agreements covering its smartphone  technology.<\/li>\n<\/ul>\n<p>However, the victory also points out something else&#8230;<\/p>\n<p><strong>Nokia&#8217;s Lost Opportunity in the Mobile Phone Industry <\/strong><\/p>\n<p>And that is&#8230; Nokia blew its chance for continued dominance in <a href=\"http:\/\/www.investmentu.com\/2010\/September\/nokia-and-the-mobile-phone-industry.html\" >the mobile phone industry<\/a>.<\/p>\n<p>After all, Apple is acknowledging that its iPhone owes at  least some of its success to Nokia&#8217;s technology. Surely Nokia&#8217;s shareholders  must be asking why Nokia&#8217;s management didn&#8217;t implement the technology into its  own phones.<\/p>\n<p>And it looks like Nokia&#8217;s engineers were at the forefront of  smartphone technology &#8211; the patents prove it. So the company can&#8217;t blame  technology for its current shortcomings. The company had everything it needed  for continued success.<\/p>\n<p>Apparently, the company&#8217;s previous management team assumed  no one could challenge their dominance in the industry. They forgot the  company&#8217;s own humble beginnings and how it came to rule the mobile phone world.<\/p>\n<p>That negligence led Nokia to where it is today. Its stock  has lost three-quarters of its value since 2007. And <a href=\"http:\/\/www.investmentu.com\/2011\/February\/future-of-nokia-looks-bleak.html\" >Nokia&#8217;s rapidly losing global market share<\/a> to iPhones and Android-powered  phones.<\/p>\n<p><strong>Nokia&#8217;s Royalty-Based Future<\/strong><\/p>\n<p>The company&#8217;s current management team doesn&#8217;t seem much  stronger than its predecessor. It&#8217;s as if Nokia&#8217;s CEO, Stephen Elop, is still  working for his former employer, <strong>Microsoft <\/strong>(Nasdaq: <a href=\"http:\/\/www.google.com\/finance?q=NASDAQ:MSFT\" >MSFT<\/a>).<\/p>\n<p>He forged a deal with Microsoft to make Windows Phone 7 the  primary operating system for Nokia phones. And now there are the rumors about  Mr. Elop selling the entire mobile phone business to Microsoft. This would leave  little left of Nokia.<\/p>\n<p>However, Mr. Elop must be given his due for his stated  intention to use Nokia&#8217;s intellectual property rights on smartphone technology  &#8220;more strategically.&#8221;<\/p>\n<p>This immediately leads to speculation that Nokia, after its  success with the Apple lawsuit, is getting ready to go after Google and the  makers of Android smartphones like <strong>Motorola Mobility <\/strong>(NYSE: <a href=\"http:\/\/www.google.com\/finance?q=NYSE:MMI\" >MMI<\/a>).<\/p>\n<p>Perhaps he can successfully turn the company into one based  chiefly on royalties&#8230; because it&#8217;s quickly becoming irrelevant as far as smartphone  sales go. Nokia is due to fall behind Samsung in mobile phone sales by volume in  the second quarter and it&#8217;s scheduled to slip behind Apple in the third  quarter.<\/p>\n<p>And it&#8217;s still up in the air whether its move to develop  <a href=\"http:\/\/www.investmentu.com\/2011\/February\/2011-make-or-break-year-for-nokia.html\" >smartphones based on Microsoft&#8217;s Windows operating system<\/a> can win back lost  ground.<\/p>\n<p>Only time will tell.<\/p>\n<p>Good investing,<\/p>\n<p>Tony D&#8217;Altorio<\/p>\n<div class=\"feedflare\">\n<a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=i0HTVmrEXMg:tYCOSy7CZqc:yIl2AUoC8zA\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?d=yIl2AUoC8zA\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=i0HTVmrEXMg:tYCOSy7CZqc:V_sGLiPBpWU\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=i0HTVmrEXMg:tYCOSy7CZqc:V_sGLiPBpWU\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=i0HTVmrEXMg:tYCOSy7CZqc:qj6IDK7rITs\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?d=qj6IDK7rITs\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=i0HTVmrEXMg:tYCOSy7CZqc:gIN9vFwOqvQ\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=i0HTVmrEXMg:tYCOSy7CZqc:gIN9vFwOqvQ\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=i0HTVmrEXMg:tYCOSy7CZqc:F7zBnMyn0Lo\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=i0HTVmrEXMg:tYCOSy7CZqc:F7zBnMyn0Lo\" border=\"0\"><\/img><\/a>\n<\/div>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/InvestmentU\/~4\/i0HTVmrEXMg\" height=\"1\" width=\"1\"\/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A long-running dispute between two mobile phone giants &#8211; Nokia and Apple &#8211; is over. During the battle, each accused the other of stealing smartphone technology and infringing on patents. But both companies reached a settlement last week&#8230; <strong><a href=\"http:\/\/www.investmentu.com\/2011\/June\/nokia-vs-apple.html\">Nokia vs. Apple&#8230; &gt;&gt;<\/a><\/strong><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-21865","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/21865","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=21865"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/21865\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=21865"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=21865"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=21865"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}