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Nokia (NOK) Kickstarts 2024 With Honor Patent Licensing Deal
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Nokia Corporation (NOK - Free Report) has started 2024 on a promising note by inking a new patent cross-license agreement with Honor for an undisclosed amount. The licensing deal with one of the leading smartphone manufacturers in China is the fourth of its kind in the past year and portrays the inherent strength of Nokia’s patent portfolio.
In July 2023, the Finland-based telecommunications equipment manufacturer inked a multi-year cross license patent agreement with Apple Inc., per which the iPhone maker aimed to leverage Nokia’s industry-leading 5G portfolio and other technologies. This followed a similar patent deal in January with Samsung and another in December 2022 with Huawei. The licensing deals accentuate the growing acceptance of Nokia’s next-generation innovative solutions among established players and solidify its position in the wireless equipment market.
However, Nokia recently disclosed that it is likely to fall short of its 2023 financial targets as various ongoing license renewal negotiations failed to conclude before the end of the year. Consequently, the company was unable to incorporate the revenues generated from license renewals into its fiscal 2023 financial performance. This indicates that net sales, operating margin and free cash flow targets for the current fiscal year are likely to remain unfulfilled.
Moreover, Nokia was dealt a blow when AT&T Inc. inked a five-year contract with Ericsson to modernize its network infrastructure. The deal, worth about $14 billion, replaced Nokia, which once accounted for one-third of AT&T’s business, as one of the leading vendors of the carrier. With Nokia falling down the pecking order, it apparently lost out on significant revenue-generating opportunities.
Nevertheless, Nokia is well-positioned for the ongoing technology cycle, given the strength of its end-to-end portfolio. Its installed base of high-capacity AirScale products, which enables customers to upgrade to 5G quickly, is growing fast. It is driving the transition of global enterprises into smart virtual networks by creating a single network for all services, converging mobile and fixed broadband, IP routing and optical networks with the software and services to manage them. Leveraging state-of-the-art technology, it is transforming the way people and things communicate and connect.
Nokia has emerged as one of the leading players in the development of advanced 5G technology and is at the forefront of extending 5G use cases in various industries. It has laid a strong foundation of innovation through a substantial investment of $140 billion over the past two decades. This has led to the establishment of an impressive portfolio comprising approximately 20,000 patent families, including more than 6,000 patent families that are deemed crucial to 5G technology.
The company aims to create new business and licensing opportunities in the consumer ecosystem. It facilitates customers to move away from an economy-of-scale network operating model to demand-driven operations by offering easy programmability and flexible automation required to support dynamic operations, reduce complexity and improve efficiency. It seeks to expand its business into targeted, high-growth and high-margin vertical markets to address growth opportunities beyond its traditional primary markets.
The stock has lost 28.6% in the past year against the industry’s growth of 4.9%.
United States Cellular Corporation (USM - Free Report) , sporting a Zacks Rank #1, is the fourth largest full-service wireless carrier in the United States. The company provides a range of wireless products and services, and a high-quality network to increase the competitiveness of local businesses and improve the efficiency of government operations.
U.S. Cellular has taken concrete steps to accelerate subscriber additions and improve churn management. The company aims to offer the best wireless experience to customers by providing superior quality network and national coverage. It is well-positioned to support the investment required for network enhancements, including the deployment of 5G technology. The company is well-positioned for continued demand for broadband.
Workday Inc. (WDAY - Free Report) , carrying a Zacks Rank #2 (Buy), delivered a trailing four-quarter average earnings surprise of 13.24%. In the last reported quarter, it delivered an earnings surprise of 9.29%. It has a long-term earnings growth expectation of 26.5%.
Workday is a provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system that makes it easier for organizations to provide analytical insights and decision support.
Qualcomm Incorporated (QCOM - Free Report) , carrying a Zacks Rank #2, delivered an earnings surprise of 2.2%, on average, in the trailing four quarters. It has a long-term earnings growth expectation of 12.5%.
Qualcomm is one of the largest manufacturers of wireless chipsets based on baseband technology. The company is focusing on retaining its leadership in 5G, chipset market and mobile connectivity with several technological achievements and innovative product launches. It is facilitating the seamless transition to super-fast 5G networks, delivering low-power resilient multi-gigabit connectivity with unprecedented range and Qualcomm's best-in-class security. This, in turn, offers the flexibility and scalability needed for broad and fast 5G adoption through accelerated commercialization by OEMs.
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Nokia (NOK) Kickstarts 2024 With Honor Patent Licensing Deal
Nokia Corporation (NOK - Free Report) has started 2024 on a promising note by inking a new patent cross-license agreement with Honor for an undisclosed amount. The licensing deal with one of the leading smartphone manufacturers in China is the fourth of its kind in the past year and portrays the inherent strength of Nokia’s patent portfolio.
In July 2023, the Finland-based telecommunications equipment manufacturer inked a multi-year cross license patent agreement with Apple Inc., per which the iPhone maker aimed to leverage Nokia’s industry-leading 5G portfolio and other technologies. This followed a similar patent deal in January with Samsung and another in December 2022 with Huawei. The licensing deals accentuate the growing acceptance of Nokia’s next-generation innovative solutions among established players and solidify its position in the wireless equipment market.
However, Nokia recently disclosed that it is likely to fall short of its 2023 financial targets as various ongoing license renewal negotiations failed to conclude before the end of the year. Consequently, the company was unable to incorporate the revenues generated from license renewals into its fiscal 2023 financial performance. This indicates that net sales, operating margin and free cash flow targets for the current fiscal year are likely to remain unfulfilled.
Moreover, Nokia was dealt a blow when AT&T Inc. inked a five-year contract with Ericsson to modernize its network infrastructure. The deal, worth about $14 billion, replaced Nokia, which once accounted for one-third of AT&T’s business, as one of the leading vendors of the carrier. With Nokia falling down the pecking order, it apparently lost out on significant revenue-generating opportunities.
Nevertheless, Nokia is well-positioned for the ongoing technology cycle, given the strength of its end-to-end portfolio. Its installed base of high-capacity AirScale products, which enables customers to upgrade to 5G quickly, is growing fast. It is driving the transition of global enterprises into smart virtual networks by creating a single network for all services, converging mobile and fixed broadband, IP routing and optical networks with the software and services to manage them. Leveraging state-of-the-art technology, it is transforming the way people and things communicate and connect.
Nokia has emerged as one of the leading players in the development of advanced 5G technology and is at the forefront of extending 5G use cases in various industries. It has laid a strong foundation of innovation through a substantial investment of $140 billion over the past two decades. This has led to the establishment of an impressive portfolio comprising approximately 20,000 patent families, including more than 6,000 patent families that are deemed crucial to 5G technology.
The company aims to create new business and licensing opportunities in the consumer ecosystem. It facilitates customers to move away from an economy-of-scale network operating model to demand-driven operations by offering easy programmability and flexible automation required to support dynamic operations, reduce complexity and improve efficiency. It seeks to expand its business into targeted, high-growth and high-margin vertical markets to address growth opportunities beyond its traditional primary markets.
The stock has lost 28.6% in the past year against the industry’s growth of 4.9%.
Zacks Rank & Key Picks
Nokia carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
United States Cellular Corporation (USM - Free Report) , sporting a Zacks Rank #1, is the fourth largest full-service wireless carrier in the United States. The company provides a range of wireless products and services, and a high-quality network to increase the competitiveness of local businesses and improve the efficiency of government operations.
U.S. Cellular has taken concrete steps to accelerate subscriber additions and improve churn management. The company aims to offer the best wireless experience to customers by providing superior quality network and national coverage. It is well-positioned to support the investment required for network enhancements, including the deployment of 5G technology. The company is well-positioned for continued demand for broadband.
Workday Inc. (WDAY - Free Report) , carrying a Zacks Rank #2 (Buy), delivered a trailing four-quarter average earnings surprise of 13.24%. In the last reported quarter, it delivered an earnings surprise of 9.29%. It has a long-term earnings growth expectation of 26.5%.
Workday is a provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system that makes it easier for organizations to provide analytical insights and decision support.
Qualcomm Incorporated (QCOM - Free Report) , carrying a Zacks Rank #2, delivered an earnings surprise of 2.2%, on average, in the trailing four quarters. It has a long-term earnings growth expectation of 12.5%.
Qualcomm is one of the largest manufacturers of wireless chipsets based on baseband technology. The company is focusing on retaining its leadership in 5G, chipset market and mobile connectivity with several technological achievements and innovative product launches. It is facilitating the seamless transition to super-fast 5G networks, delivering low-power resilient multi-gigabit connectivity with unprecedented range and Qualcomm's best-in-class security. This, in turn, offers the flexibility and scalability needed for broad and fast 5G adoption through accelerated commercialization by OEMs.