Nokia offered a glimpse into its post-manufacturing future in the mobile phone business after the company confirmed it has ended a patent infringement spat with Taiwanese device maker HTC at the eleventh hour.
HTC has avoided a ban on shipments of its LTE smartphones into the United States by agreeing to license the essential Nokia patents just before US authorities were due to decide whether to ban shipments of HTC smartphones on grounds of patent infringement.
The Finnish vendor confirmed a previous stock exchange statement that a deal had been agreed, revealing HTC will pay royalties to use its intellectual property, and that the pair will explore future technology collaborations in future.
"This agreement validates Nokia's implementation patents and enables us to focus on further licensing opportunities," said Paul Melin, chief intellectual property officer at Nokia.
Nokia is set to exit the device manufacturing business by the end of the current calendar quarter, when it completes the sale of the devices & services unit to Microsoft for around €5.4 billion. However, a key element of the deal is that Nokia keeps control of its extensive patent portfolio, which it will monetise via future licensing agreements similar to that reached with HTC.
HTC, meanwhile, is seeking to claw back lost ground in the smartphone market, where fierce competition is taking its toll on profits. The vendor generated a net profit of NT$310 million (€7.4 million) in the fourth quarter of 2013, compared to NT$1 billion in fourth quarter of 2012. Earnings per share fell from NT$1.21 in the final quarter of 2012, to NT$0.38 in the recent period.
Grace Lei, general counsel of HTC, said the Nokia agreement frees the firm to "stay focused on innovation for consumers".
HTC co-founder and chairwoman, Cher Wang, last week told Reuters the company had focused too heavily on the high-end of the smartphone market in 2013, and is planning to launch more mid-tier devices to boost its competitiveness.
The end of HTC and Nokia's patent dispute comes a fortnight after Ericsson and Samsung agreed a cross-licensing deal to settle various patent disputes. The South Korean vendor agreed to pay an initial settlement, then ongoing royalty payments to Ericsson.
Exact details of the payments were not disclosed.
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