Nokia sues Apple for patent infringement

HELSINKI - Nokia announced Wednesday it was suing Apple in German and US courts for patent infringement, claiming the US tech giant was using Nokia technology in "many" products without paying for it.

Finnish Nokia, once the world's top mobile phone maker, said the two companies had signed a licensing agreement in 2011, and since then "Apple has declined subsequent offers made by Nokia to license other of its patented inventions which are used by many of Apple's products."

"After several years of negotiations trying to reach agreement to cover Apple's use of these patents, we are now taking action to defend our rights," Ilkka Rahnasto, head of Nokia's patent business, said in a statement.

The complaints, filed in three German cities and a district court in Texas, concern 32 patents for innovations related to displays, user interface, software, antennae, chipsets and video coding. Nokia said it was preparing further legal action elsewhere.

Nokia was the world's leading mobile phone maker from 1998 until 2011 when it bet on Microsoft's Windows mobile platform, which proved to be a flop. Analysts say the company failed to grasp the growing importance of smartphone apps compared to hardware.

It sold its unprofitable handset unit in 2014 for some $7.2 billion to Microsoft, which dropped the Nokia name from its Lumia smartphone handsets.

Meanwhile Nokia has concentrated on developing its mobile network equipment business by acquiring its French-American rival Alcatel-Lucent.

Including its 2013 full acquisition of joint venture Nokia Siemens Networks, Nokia said the three companies united represent more than 115 billion euros of R&D investment, with a massive portfolio of tens of thousands of patents.

The 2011 licensing deal followed years of clashes with Apple, which has also sparred with main rival Samsung over patent claims.

At the time, Apple cut the deal to settle 46 separate complaints Nokia had lodged against it for violation of intellectual property.

source: news.abs-cbn.com

Why South Korea telcos released Samsung Galaxy S5 early

SEOUL - Samsung voiced annoyance Thursday after South Korean telecoms operators released its latest smartphone ahead of schedule in order to dodge sales restrictions imposed by regulators.

The world's biggest mobile phone maker had planned to release the Galaxy S5 -- first unveiled in February -- globally on April 11.

But the South's top operator SK Telecom, along with smaller rivals KT and LG Uplus, started selling the phone on Thursday.

Seoul's telecoms regulators have suspended all three firms from signing up new customers for 45-day periods each -- ranging from March to May -- as a penalty for offering illegal discounts.

SK Telecom's business suspension begins April 5 -- before Samsung's planned Galaxy S5 launch date -- and continues until May 19.

Samsung said in a statement that the earlier-than-scheduled release was made "independently" without its consent.

"We express our regret at this decision and we are working to verify all the facts," it said, adding it would stick to the April 11 release date for the rest of the world.

SK Telecom said the early release was motivated by a desire to "meet customer needs more quickly". It declined to elaborate further.

Samsung is hoping the Galaxy S5 will cement its lead in the global smartphone market.

The South Korean giant made about 30 percent of all smartphones sold in the world last year, nearly twice the share of arch-rival Apple.

The Galaxy S5 boasts a range of new features including a fingerprint scanner and a built-in heart rate sensor.

But Samsung faces a daunting challenge to keep momentum in the increasingly competitive and saturated market.

Competition is fierce in South Korea's vibrant mobile market, where the number of subscribers exceeds the country's total population of 50 million as many use several handsets.

Nearly 70 percent of the subscribers use smartphones -- one of the highest penetration rates in the world.

source: www.abs-cbnnews.com

Nokia clings onto cash despite big loss

HELSINKI — Ailing mobile maker Nokia turned in another thumping loss on Thursday, as it tries to arrest a decline towards irrelevance in a smartphone market dominated by Apple’s iPhone and Samsung’s Galaxy models.

The company, which has been burning through money at a rate that would clean it out in a couple of years, managed, however, to cling on to more of its cash reserves in the second quarter than the market had feared, giving its battered shares an 18 percent boost.

The shares had fallen around 80 percent since February 2011 when the company announced its shift to the largely untried Microsoft Windows phone operating system.

Sales of its new Lumia phones, which run the Microsoft software, doubled from a low base in the previous quarter, but have yet to grab share back from Apple and Samsung Electronics in the most profitable part of the mobile market.

Nokia reported a second-quarter net loss of 1.53 billion euros, or 8 euro cents a share when adjusted for one-off items, compared with the market’s average forecast for a loss of 9 euro cents a share. It held net cash of 4.2 billion euros ($5.2 billion), compared with the market estimate of 3.7 billion, but still down from 4.9 billion at the end of the first quarter.

The company’s shares were up 15 percent at 1.576 euros at 1157 GMT, having touched 1.621 euros.

Details showed that advance royalty payments of 400 million euros accounted for most of the lower fall in its cash position.

“It’s partly the advanced royalties. Nevertheless, it was a positive move by management to calm down the market,” said Juha Varis, who holds Nokia shares as part of the Danske Invest Finnish Equity Fund.

But Varis said he was worried Nokia had placed all its bets on Windows Phone, which wasn’t yet showing it could help reverse Nokia’s fortunes.

THIRD-QUARTER WARNING

Nokia sold 4 million Windows phones in the second quarter, still only a fraction of Apple’s expected sales of 30 million iPhones or Samsung’s 50 million smartphones.

“I think currently the company is too dependent on Microsoft,” Varis said. “What happens if this marriage ends? We would prefer to have a second option to Windows.”

Nokia forecast its third-quarter loss in the phone business would be just as steep as the second at minus 9.1 percent, an outlook that was worse than analysts had expected.

“The third quarter is going to be the most difficult quarter for Nokia,” said J.P. Morgan analyst Sandeep Deshpande.

“I don’t think there’s anything fundamentally fixed, and a guide of minus 9 percent again in D&S (Devices and Services) came as a bit of a shock to us. So I’m perplexed by the strength of the (market) reaction,” said Lee Simpson, analyst at Jefferies & Co.

In the three months to June, all three major credit ratings agencies have cut Nokia bonds to “junk”, while the company warned twice on profits and said it planned to cut one in five jobs.

source: interaksyon.com

Nokia warns of losses for first two quarters

HELSINKI — Ailing mobile phone maker Nokia warned its phone business would post losses in the first two quarters this year, as it struggles to revamp its product line to compete with rivals Apple and Samsung.

Earlier on Wednesday, Nokia also said it had found a software bug in the new Lumia 900 smartphone, its big hope to take on Apple’s iPhone, and was effectively giving the model away until it is fixed.

Nokia said its phone business, which is launching new products on Microsoft’s Windows Phone operating system to reverse the decline of old lines running Symbian software, would make an operating loss of around 3 percent of sales in the first quarter, having earlier forecast around breakeven. It predicted a similar or larger loss in the second quarter, below all 29 analysts’ forecasts gathered by Reuters.

On average, analysts had expected a profit margin of 0.4 percent for the first quarter, and 2.1 percent for the second.

“It’s a disaster,” said Thomas Langer at WestLB. “Shipments of Symbian devices are declining faster than we anticipated … (and) the ramp up of Lumia devices is not fast enough to compensate for the shortfall.”

Nokia’s share price plunged as much as 19 percent to 3.10 euros after news of the coming losses hit the market, their lowest level since the 1990s. The shares had already dropped more than 50 percent since the firm unveiled the swap to Microsoft in February 2011.

“Nokia’s challenges have been exacerbated by rampant competition – notably Apple and Samsung, who are extracting a disproportionate amount of margin from the industry at present,” said Ben Wood at CCS Insight.

Though still the world’s biggest volume maker of cellphones, Nokia lost the top spot in the lucrative smartphone market last year to Apple and phones running Google’s (GOOG.O) Android system, in part due to its weak performance in the United States, where its smartphones have slipped to less than a 1 percent market share.

Lost ground

WestLB’s Langer does not expect the problems to end in the second quarter.

“In Q3 we will have the iPhone 5 and (Samsung’s) Galaxy S3 and so on, so EPS (Nokia’s earnings per share) for 2012 is now somewhere in limbo. I think they need to start the second or maybe the third phase of a restructuring program. It’s a very difficult situation for them.”

Nokia said it sold over 2 million units of all its Lumia smartphone models in the quarter to end March, up from over 1 million in the overlapping November-to-January period, but analysts said they had expected a faster uptick in sales.

Mikael Rautanen from research firm Inderes said he was expecting twice the sales volume.

“This poured a lot of cold water on investors, and I think the stock is reacting accordingly,” he said.

The battle to recover lost ground was made a little harder by the data connection bug in the Lumia 900, Nokia’s first 4G phone, which it markets with the strapline “an amazingly fast way to connect”. Nokia said a software update to fix the problem, a “memory management issue” related to phone software, not to hardware or the Windows operating system, would be available around April 16.

It is offering anyone who has bought a Lumia 900 phone, or who buys one by April 21, a $100 credit to their AT&T bill. The operator sells the phone for $99.99 with a two-year contract.

The Lumia 900 is currently only available in the United States, where it was launched on April 8, and is key to Nokia’s comeback there.

“It’s like they stalled their engine when everybody is looking at them at the start of their race,” said Gartner analyst Carolina Milanesi.

It is the third Nokia phone to run the Windows operating system since the company ditched the Symbian system last year. It is due for a wider global launch this quarter. The model won several awards at the Consumer Electronics Show in Las Vegas when it was unveiled in January.

Costly glitch

“I must say I have not encountered anything, but I have been impressed by their forthright, aggressive, and undoubtedly costly response,” said Boston-based analyst John Jackson from CCS Insight, who uses the Lumia 900.

Though one analyst who asked not to be named said it would only cost Nokia at most $10 million on likely sales before the fix, it will be a big disappointment to a company struggling to revive its brand. Its share of the global smartphone market tumbled to 12 percent in the fourth quarter of last year from 30 percent a year earlier.

“To have a memory issue causing disruption to what was otherwise, apparently, a fairly good launch, with prime time ads and reasonable reviews, is the last thing they needed – particularly in the U.S.,” said Tim Shepherd, analyst at Canalys, before the loss warnings.

Nokia created the smartphone industry in the late 1990s with its Communicator models and was the undisputed leader until Apple’s iPhone entered the ring in 2007 and Google’s Android system was released in late 2008. In late 2010 it replaced its chief executive with Stephen Elop, who headed Microsoft’s business division, and later switched to the Microsoft Phone system to arrest the decline.