“On Friday, the slimmed-down firm [Nokia] upped its 2015 expected operating margin for its networks business to between 8 to 11 percent. The upgrade was widely expected, after Nokia reported operating margin of 11.4 percent in the first nine months of this year, driven by a major project in China as well as high demand for 4G,” Arjun Kharpal reports for CBNC. “This led shares to tumble to close 5.5 percent down on the day, as the margin upgrade was already baked into the share price.”
“The capital day came after Nokia sold its cash-burning ‘Devices and services’ business to Microsoft earlier this year for 5.44 billion euros ($6.78 billion). The company is a different beast to the company that once dominated the mobile handset space and bolstered the Finnish economy—until it fell behind in the rapidly moving smartphone market that Apple and Samsung now control,” Kharpal reports. “While CEO Rajiv Suri is touting the Internet of Things, analysts suggest that Nokia’s patents and licensing business, known as Technologies, could be its most lucrative unit. Nokia Technologies saw a 13 percent rise in operating profit in the first nine months of the year, compared to the same time last year. ‘As a whole, the key profit driver during the upcoming years will be the technologies unit and licensing business,’ Mikael Rautanen, technology analyst at Inderes, told CNBC by phone.”
“Suri ruled out a direct return to the handset market at the investor conference, but said the brand could reappear under license. This would mean Nokia selling their brand to smartphone makers, a move that would be dramatic, according to Rautanen,” Kharpal reports. “‘Now they don’t have the mobile phone business, the patent portfolio will make good money for the company and this dramatically changes the dynamics of the licensing business,’ Rautanen said.”
Read more in the full article here.
MacDailyNews Take:
Apple’s iPhone is a “niche product.” — Nokia’s then-CEO Olli-Pekka Kallasvuo, April 17, 2008
Olli-Pekka is currently “spending time with his family.”
[Thanks to MacDailyNews Reader “Edward W.” for the heads up.]