Patents appear to be holding up Microsoft’s plan to purchase Nokia’s handset business. The $7.2 billion purchase price does not include Nokia’s patent portfolio. Instead of buying those patents, Microsoft plans to continue to license them after the deal closes. The deal terms call for a non-exclusive patent licensing arrangement, meaning that other companies can continue to license Nokia’s patents as well. Those other companies are thought to be holding up the closing by pressuring Chinese regulators.
Google and Samsung are reportedly pressuring Chinese authorities to help limit the amount that Nokia will charge them to license its patents. Right now, competing device makers have leverage with Nokia since they license their own patents to Nokia’s smartphone unit. Going forward, Nokia’s primary business will be its NSN infrastructure unit, and it will not need to license as many device-related patents.
The Microsoft Nokia deal was set to close this month, but now Nokia says talks with Asian regulators are delaying the closing. But the company is still hopeful that the deal will close next month.
When the deal was announced last fall, Nokia and Microsoft said that roughly one third of Nokia’s workforce of 90,000 will transfer to Microsoft. Of the 32,000 employees moving to Microsoft, about 4,700 are in Finland and will remain there. Nokia slashed roughly 10,000 jobs during 2012 and 2013.
Nokia was the world’s leading mobile phone maker as recently as 2011, but Samsung has taken that title as smartphones have supplanted the feature phones that are Nokia’s stronghold. The Lumia is Nokia’s flagship smartphone, and the company cast its lot with Microsoft by adopting the Windows operating system for its Lumia line. More recently, Nokia introduced an Android smartphone, the Nokia X.
