Nokia (NOK +6.87%) is notably hanging on to its wide patent portfolio instead of selling it to Microsoft (MSFT +2.01%), opting to license its IP to the software giant instead. To date, the company has primarily used its patents defensively.
Nokia's IP is a valuable asset that it can continue to monetize, and the company could potentially pursue Google (GOOG 1.64%) Android OEMs aggressively for royalties. If so, that would add yet another layer of costs for Android vendors looking to bring devices to market.
Even within Nokia's existing cross-licensing agreements, the company can effectively eliminate its outgoing royalty payments since it will no longer sell handsets, and keep the incoming royalty checks flowing in.
In the following video, Erin Kennedy discusses Nokia's possible patent strategy with Evan Niu, CFA, and Eric Bleeker, CFA.
