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. The dispute stems from a binding arbitration agreement reached between the two companies in 2013, which addressed 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 an estimate suggesting that Nokia could gain around 700 million euros ($758 million) in operating profit this year from the ruling. He predicts that the court may require Samsung to pay Nokia 300 million euros (or $325 million) annually in patent fees. Currently, Samsung pays about 100 million euros per year in royalties to Nokia. If the new ruling is implemented, Samsung may need to pay back the difference for the past two years.
Despite the current 100 million euro annual payment already reflected in Nokia’s financial statements, the potential increase to 300 million euros could significantly boost Nokia’s EBIT (earnings before interest and taxes) this year.
Since Nokia acquired Alcatel-Lucent in April 2022 for 15.6 billion euros, its stock price has dropped by 9%. However, due to the potential impact of this patent case, Sakamies has rated Nokia's stock as a "hold." While the integration of Alcatel-Lucent is expected to be completed this quarter, investors remain concerned about the smoothness of the process and the negotiations with the French government regarding special terms.
If the final judgment results in a penalty higher than expected, Nokia’s stock could see a significant surge. In a similar situation, Ericsson’s stock rose sharply last month after its IP revenue increased by 40% in 2015 due to patent licensing deals with Apple.
Once a dominant player in the global mobile phone market, Nokia has shifted its focus to communications network equipment. Despite challenges, it still holds a vast number of patents related to mobile technology. Last month, Nokia confirmed that the International Chamber of Commerce has issued an estimate and expects the final verdict on the patent dispute by the end of January this year.
On Saturday, a Nokia spokesperson declined to comment further, stating that there was nothing new to add beyond previously released statements.
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