Nokia tech sales dragged by expired licences as it warns on consumer spending
Nokia’s tech sales have continued to be dragged down by “expired licences that are in litigation” and pending renewal, the company said today.
The Finnish telecoms company, which also warned of weaker spending from consumers amid a global economic downturn, reported today that sales from its technologies business has fallen nearly 20 per cent in the third quarter.
In a statement today, president and CEO Pekka Lundmark said: “While risks around timing of outstanding deals in Nokia Technologies remain, assuming these close we continue tracking towards the high-end of our net sales guidance for 2022 and towards the mid-point of our operating margin guidance.”
It follows the now-ended legal saga with Mercedes-Benz manufacturer Daimler, which wrapped up last year.
Daimler complained to the European Commission in 2019 that Nokia was exploiting its market power with its standard essential patent for 3G and 4G, which it uses in the navigation systems in its cars.
The British carmaker had been sued in several German courts for refusing to buy licences for the tech, which is essential for autonomous driving capabilities.
Daimler eventually agreed to pay Nokia for using its patents, ending the legal row that spanned more than a year.
Nokia’s tech business has been pushing into automotive and consumer electronics since 2018. Both markets now now contribute over €100m in annual sales, said Lundmark.
“As we start to look beyond 2022, we recognise the increasing macro and geopolitical uncertainty within which we operate. While it could have an impact on some of our customers’ capex spending, we currently expect growth on a constant currency basis in our addressable markets in 2023,” the boss added.
“Considering our recent success in new 5G deals in regions like India which are expected to ramp up strongly in 2023, we believe we are firmly on a path to outperform the market and to make progress towards achieving our long-term margin targets.”
The company is expected to net between €23.9bn and €25.1bn in sales for the full year.