Daily Management Review

Nokia and Xiaomi sign a patent agreement


07/05/2017


Finnish manufacturer of mobile phones Nokia and Chinese vendor Xiaomi Technology have signed a licensing patent agreement. According to the companies, the transaction implies mutual provision of a cross-license. In addition, Nokia will supply Xiaomi with network infrastructure equipment.



Jon Russell via flickr
Jon Russell via flickr
The parties did not disclose the transaction’s financial terms. The agreement provides for cross-licensing of patents in the field of mobile communication standards. Nokia will also supply Xiaomi with equipment for network infrastructure within the partnership’s framework.

In the future, the parties allow close cooperation areas such as the Internet of things, augmented and virtual reality and creation of artificial intelligence. "Xiaomi is one of the leading manufacturers of smartphones, and we are happy that we reached an agreement," commented Nokia President and CEO Rajiv Suri.

Gizmochina blog also quotes an insider who claims that as a result of the agreement Xiaomi will provide Surge S1 processors for the new Nokia smartphone. Also, HMD Global will help Xiaomi to enter the markets of the US and other countries, the source adds.

The eight-core Surge S1 was introduced by Xiaomi in February 2017 and installed in Xiaomi Mi 5C. According to the test results, the chip operates at the level of Qualcomm Snapdragon 625, which is installed in the budget devices.

Nokia has licensing agreements with the leading manufacturers of communicators Apple and Samsung Electronics, but the contract with Xiaomi is the first such deal between the Finnish vendor and the Chinese electronics manufacturer.

Commenting on the agreement, Finnish company’s general director of the Finnish compay Rajiv Suri called Xiaomi "one of the world's leading manufacturers of smartphones."

Royalties for the use of patents constitute a significant share of Nokia's revenue. "I do not think that the deal is significant for Nokia from a financial point of view, but it's a good start for future negotiations with other Chinese manufacturers," said OP Equity analyst Hannu Rauhala.

Bloomberg says the agreement between Nokia and Xiaomi also includes sale of the Finnish company’s patent package to the Chinese manufacturer, with no other details.

Last year, Chinese Xiaomi reduced the supply of devices, and in the first quarter of 2017, IDC analysts placed the company only in fifth place in shipments of smartphones to China, behind its compatriots and competitors Huawei and Vivo.

"Chinese Apple" finally decided to move away from selling its products only through the Internet, deciding to organize sales through traditional physical stores. By 2019, the company plans to open 1 thousand of its Mi Home sales outlets, which is about twice the number of Apple's branded stores in the world. According to Xiaomi, by 2021, retail sales will have to reach 70 billion yuan ($ 10 billion).

source: bloomberg.com, gizmochina.com






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