Nokia and Samsung have been locked in a legal battle for over two years, with the final ruling expected to be announced soon. According to Reuters, analysts predict that Samsung could face a one-time fine of 700 million euros. This dispute stems from a binding arbitration agreement reached in 2013 between the two companies, which aimed to resolve a five-year patent compensation fee starting in 2014. The International Chamber of Commerce's arbitral tribunal is handling the case and is set to deliver its decision shortly.
Sami Sarkamies, a Nordic banking analyst, has provided a detailed projection, suggesting that Nokia could see an operating profit of 700 million euros this year due to the potential fine. It’s also expected that Samsung may be required to pay an annual patent fee of 300 million euros (approximately 325 million U.S. dollars) to Nokia. Currently, Samsung pays around 100 million euros in royalties each year, but after the verdict, this amount could rise significantly.
According to Sarkamies, once the ruling is finalized, Samsung may need to retroactively pay the increased fees for the past two years. However, since Nokia has already accounted for the current 100 million euro royalty in its financial statements, the additional revenue from the new rate could boost its pre-tax profit by 700 million euros this year.
Nokia’s stock price dropped by 9% following its acquisition of Alcatel-Lucent in April 2022 for 15.6 billion euros. Despite this, analysts like Sarkamies have maintained a "hold" rating on Nokia shares, citing the potential impact of the patent case. The integration of Alcatel-Lucent is expected to be completed this quarter, though investors remain cautious about the process and the negotiations with the French government.
If the final judgment results in a higher penalty than anticipated, Nokia’s stock could experience a significant surge. In a similar case last month, Ericsson’s share price rose sharply after its 2015 IP revenue increased by 40% due to patent licensing deals with Apple.
Once a dominant force in the global mobile phone market, Nokia has shifted its focus to communications network equipment. Despite this transition, it still holds a substantial number of patents related to mobile technology. Last month, Nokia confirmed that the International Chamber of Commerce has provided an estimate and that the final ruling on the patent dispute is expected by the end of January.
On Saturday, a Nokia spokesperson declined to comment further, stating that the company has no additional information beyond its previous announcements.
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