How Important Is The Licensing Business For Nokia?

April 13th, 2016 by Trefis Team
+1.40%
Upside
4.46
Market
4.52
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NOK: Nokia Oyj logo
NOK
Nokia Oyj

Nokia Technologies – Nokia’s licensing business – contributes almost 40% to the company’s value, according to our estimates, despite accounting for just 8% of its revenues. This is because licensing is a highly profitable business with EBITDA margins close to 73%, as opposed to the networks business, where EBITDA margins are low at 15%. Additionally, revenues for the licensing segment are expected to grow almost four times as fast as those of the company overall, due to the presence of an extensive patent portfolio that Nokia can easily license after the sale of its smartphones business to Microsoft, which reduced the probability of countersuits.

NOK licensing important

NOK important segment

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Nokia
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