Nokia Shares Higher on New Chip Strategy, Despite InterDigital Patent Claim

InterDigital filed a complaint Tuesday with the U.S. International Trade Commission against Nokia, alleging it engaged in unfair trade practices by infringing on two of its patents. Shares of Nokia are trading to the upside in Helsinki however, as the firm announced it plans to use more commercially available chipsets. Nokia said it will discontinue parts of its own chipset development in order to "focus on its core competencies in chipset development (and modem technology), leverage external innovation, and foster competition in the chipset industry." Nokia also said it wants to focus on software to power internet services. Texas Instruments will continue to be a "broad scope supplier," while Broadcom was chosen as a supplier in EDGE, Infineon Technologies in GSM and STMicroelectronics in 3G. As for InterDigital's patent infringement claim, Nokia said it "intends to vigorously defend itself ...." Nokia was last up 1.85% to €22.05. Its ADRs lost 1.36% to $29.76 on Tuesday.

Sources: Press release I, II, III, Associated Press, MarketWatch, Reuters
Commentary: Nokia's Restructuring: Nobody Loves A Value-Chain Hog • Nokia Shares Jump on 2Q Earnings Beat, Margin Expansion • Motorola’s Failures Positive For Nokia
Stocks/ETFs to watch: NOK, IDCC, TXN, BRCM, IFX, IFX. Competitors: STM, ERIC, SNE, Samsung [not traded in the U.S., but a 15% component of iShares MSCI S. Korea (EWY)]. ETFs: MTK, WMH
Earnings call transcripts: Nokia Q2 2007

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