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Nokia and Xiaomi Ink Patent and Business Cooperation Pact

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Nokia Corporation (NOK - Free Report) has signed a deal with Chinese company Xiaomi for business collaboration and a multi-year patent license. This includes a cross license to each company’s cellular standard essential patents. Xiaomi acquired Nokia’s patent assets as part of this transaction. Financial details of the deal were not revealed.

Per the business cooperation agreement, Nokia will provide network infrastructure equipment for delivering high capacity besides low power requirements to benefit web providers as well as datacenter operators. The companies will work together on several issues namely, optical transport solutions, IP Routing and a data center fabric solution. They will also explore opportunities in key areas like Internet of Things.

We remind investors that earlier in the year, Nokia settled a patent related dispute with Apple (AAPL - Free Report) . Following the deal, Nokia received an up-front payment in cash from Apple.

This dispute settlement with Apple has removed a major overhang from Nokia’s shares. Shares of the company have outperformed the Zacks categorized Wireless Equipment industry over the last three months. The stock has rallied 18.73%, while the industry has gained 3.46%.

Zacks Rank & Other Key Picks

Nokia currently carries a Zacks Rank #2 (Buy). Investors interested in the broader Computer and Technology sector may also consider Ubiquiti Networks, Inc. and Arista Networks, Inc. (ANET - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Ubiquiti Networks and Arista Networks have gained over 4% and 10%, respectively, in the last three months.

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