How Invisible Waves Have Changed the World
2018-05-03 [Petri]
Apple's quarterly results beat the expectations again: only the amount of sold iPhones was a tiny bit below the market estimates. Tim Cook really has made under-promising and over-performing an art form.
But if we reflect this against what happened last week when Nokia produced its quarterly results, we gain another dimension to the stellar performance of Apple:
While Nokia's Networks operations produced the majority of revenue at 4.3 billion euros, they only brought in a measly 43 million in profits.
In contrast, Nokia's Technologies operations, which contain their patent-related income, had a revenue of only 365 million euros, but brought in 274 million euros in profits.
Percentage-wise, the profit margin for Networks is just below 1%, and for Technologies it is a whopping 75%, which is simply amazing.
Although many of the current smartphone manufacturers contribute to the Technologies IPR portfolio income, large chunk of it comes from Apple, which is not part of the fair, reasonable and non-discriminatory (FRAND) patent pool of manufacturers, as discussed in my book in Chapter 10: Internet in Your Pocket.
While it looks like the Network business is just treading water and should be disposed of immediately due to its dismal return on investment, this is most likely just a temporary situation: Networks operations are expected to show much better numbers as soon as the operators' 5G upgrades start in earnest.
Leading-edge R&D is not cheap and Nokia already has some amazing technology ready for 5G: in my Gallery section you can find a link to Nokia's ReefShark technology video.
But before the 5G rollout commences, Nokia sure is happy that even though they no longer produce smartphones, their legacy continues to bring home the bacon.
Over one billion euros of clean profit on a yearly level from IPR income is no small feat.
And they are clearly not just resting on their laurels and waiting for the old patents to expire: looking at the number of US patents per company, the latest statistics I found were from 2016, and Nokia was number 59. Although it was way behind the wireless competitors of Samsung (#2) and Qualcomm (#6), it had the third largest annual growth percentage (74%) of the top-100 companies on the list.
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Show latest Earlier entries
Waiting for the 5G rollouts: Nokia's Networking business
You can purchase A Brief History of Everything Wireless: How Invisible Waves Have Changed the World from Springer or from Amazon US, CA, UK, BR, DE, ES, FR, IT, AU, IN, JP. For a more complete list of verified on-line bookstores by country, please click here.
Earlier entries:
You can purchase A Brief History of Everything Wireless: How Invisible Waves Have Changed the World from Springer or from Amazon US, CA, UK, BR, DE, ES, FR, IT, AU, IN, JP. For a more complete list of verified on-line bookstores by country, please click here.
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