In a research report published on Wednesday, BMO Capital analyst Tim Long reiterated an Outperform rating on shares of Nokia Corp (ADR) (NYSE:NOK) with a price target of $7.00, after the company announced a patent licensing joint venture with Samsung.
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This expanded agreement is in addition to the outcome of the arbitration between the two companies that was announced on February 1, 2016.
Management states that the run rate for the Technologies business will grow to Euro 950 million by the end of 2016.
The formal announcement comes, after the two had deliberated the terms in February this year, and agreed upon extending the deal on Feb 1, 2016.
Through this agreement, Nokia is expecting an increase in net sales for its licensing and technology arm Nokia Technologies starting from the third quarter of 2016.
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In May Nokia confirmed that it had exited the mobile device business by licensing the Nokia brand and some of its intellectual property to another Finnish company called HMD. By focusing on Digital Health, Digital Media, Brand Licensing and Patent Licensing, TECH is expanding the human possibilities of the ever-evolving world of technology. They do mention that the new deal will let both the companies share “certain additional patent portfolios”. As Techcrunch points out, Nokia has been planning its return for a while and this licensing deal with Samsung is meant to help it create a “new generation” of smartphones and tablets.
