Nokia signs smartphone patent license deal with China’s Huawei

Nokia, the Finnish multinational communications, information technology and consumer electronics company, said Thursday it had signed a multi-year smartphone patent license deal with China’s Huawei, completing its list of agreements with the world’s largest handset makers.

The new deal is one in a series of deals with global mobile phone makers. Nokia recently struck licensing deals with handset makers including Apple, Samsung Electronics, LG, and Xiaomi.

More than 90 percent of Nokia’s revenue comes from telecoms network equipment, but the licensing payments are highly profitable amid an industry-wide slump in the network business.

Both companies did not provide financial details of the agreement, stating that it was confidential, but Nokia expects revenue to stem from the agreement in the fourth quarter.

Nokia’s shares indeed rose 2.7 percent Thursday morning on account of the deal, according to Reuters.

“It’s a significant deal because Nokia now has agreements with all the big phone makers. The network market will remain tough, but the growing patent revenue will compensate for it,” said Mikael Rautanen, an analyst from research firm Inderes, which holds a “buy” rating on the stock.

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He said revenue from the Huawei deal would be smaller than from Apple, which he estimated to be around 250 million euros ($297 million) annually.

“The (Huawei) ballpark (figure) could be somewhere over 100 million euros annually,” he said.

Nokia built up its catalog of patents in the days when the company dominated the mobile handset business. It covers technology that reduces the need for hardware components in a phone, conserves battery life and increases radio reception, among other features.