Seeking Alpha

Research In Motion (RIMM) is paying Nokia (NOK) a one-time fee of €50M ($65M) as part of...

Research In Motion (RIMM) is paying Nokia (NOK) a one-time fee of €50M ($65M) as part of the companies' patent settlement, RIM disclosed in a 6-K. RIM is also making ongoing royalty payments as part of the deal, which covers the use of Nokia's Wi-Fi patents.
From other sites
Comments (9)
  • dhdhoora
    , contributor
    Comments (418) | Send Message
     
    An interesting tidbit to the argument that somehow NOK and RIMM are in the same league. Hope that RIM sells a boatload of phones to the corporate America. This would be great news for Nokia -- along with all of those WP8 phones from Samsung and HTC that will be paying Nokia to play!

     

    All the very best,
    Don
    27 Dec 2012, 02:30 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5585) | Send Message
     
    So is it good to buy both (NOK) and (RIMM)?
    27 Dec 2012, 06:56 PM Reply Like
  • kmi
    , contributor
    Comments (4030) | Send Message
     
    RIM turned around and sold an asset at some $55m yesterday (can't remember which) which I thought was interesting in light of the royalty payment made to Nokia.

     

    RIM is doing a good job of balancing its books/cashflow and NOK is as well, while also leveraging its patent portfolio and selling non-core assets.

     

    I like NOK's potential to grow emerging market share as well as its relationship with MSFT as I expect tighter Windows integration over time. RIM's overall growth potential seems constrained by its smaller ecosystem, corporate/enterprise/s... focus, and the fact that it likely has a hard time competing with NOK on price in low cost emerging markets which are growing (even though margins there aren't great).

     

    I think both had gotten priced for bankruptcy (mostly in light of the Palm story) and much of the rebound thus far has been a result of that money changing its mind. As in, the bets are that both these companies aren't going away. So now the investor question is one of cashflow and return, and I think both companies have that potential, although I favor NOK right now until I see what happens at BB10 launch.
    28 Dec 2012, 06:46 AM Reply Like
  • oneinfiniteloop
    , contributor
    Comments (663) | Send Message
     
    @kmi - IMO, in the near term (early part of 2013) bearing a bearish posture on RIMM will be prudent. RIMM's product portfolio is quite limited (unlike iPhone, Samsung, Nokia) I think the downside risk that RIMM runs into is much larger in case BB10 was to fail. Some of the big enterprises that were Blackberry shops have now switched (or are on their way to switch) to iPhone and Samsung as their preferred choice (and have pulled Blackberry from the selection list altogether). So, IMO RIMM's enterprise refreshes/renewals will be on a decline through 2013. Last but not the least, I also understand that defense department, state and local governments are pulling out of RIMM and switching exclusively to iPhones (even President Obama switched to an iPhone).

     

    In the initial phase I think consumers (like you and me) will have to salvage RIMM's future (by buying boat loads of BB10) and enterprises might comeback much, much later. Given that Nokia and Samsung are trying to hit at every price point (and will likely undercut BB10) it is going to be challenging for RIMM to get back its foot holding. RIMM reported differentiations is that it can run Android apps (through a Dalvik (?) simulator on BB10 - with a performance penalty), if somebody is really interested in running Android apps they might as well buy Samsung or Motorola rather than buying BB10 as RIMM's native application portfolio is very limited. Their hardware specs also look to be pretty limited and not sure if they will be able to aggressively cut prices to compete with the likes of Samsung.

     

    The other issue is that if indeed RIMM fails then I don't think there will be any other company that would want to buy them simply because there are enough "eco systems" out there already (iOS, Android and Windows Phone 8) and RIMM has nothing unique to offer. So, I guess that would essentially mean fire sale of RIMM's assets.

     

    Although I like what RIMM has done so far IMO they are a bit late to the party. I am waiting for the euphoria to build up and I plan to buy puts on RIMM sometime after the launch of BB10.
    28 Dec 2012, 01:02 PM Reply Like
  • kmi
    , contributor
    Comments (4030) | Send Message
     
    Outstanding comment oneinfiniteloop, I share a lot of the same opinions on RIM, although I'm more flat than bearish.

     

    I just want to point out one thing though with regard to: "RIMM reported differentiations is that it can run Android apps (through a Dalvik (?) simulator on BB10 - with a performance penalty)"

     

    I've run Android apps on Playbook and find in some instances the performance hit isn't noticeable and in others its dreadful. I think what RIM is doing with regard to this bears notice: it's software and developer kits are better than they've ever been. I think if they make it easy enough the devs won;t stress about it.

     

    I also think a nice differentiator for RIMis precisely it's lack of ecosystem. I'm a customer because I don't feel like I'm constantly being forced to join one service or another, or being upsold other products and services and being ad-addled...

     

    So I think there is meaningful value in RIM's model, but I definitely agree that it's an uphill battle. I don't hold RIM stock but I do hold NOK.
    28 Dec 2012, 05:43 PM Reply Like
  • stocks87
    , contributor
    Comments (29) | Send Message
     
    NOK must be enjoying patient suite they have. Either way even if RIM outsold devices or Samsung, they would continue to reap royalty payments. good luck NOK
    27 Dec 2012, 02:45 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8611) | Send Message
     
    How much are the payments?
    27 Dec 2012, 04:14 PM Reply Like
  • Sal Marvasti
    , contributor
    Comments (1364) | Send Message
     
    not enough to sustain a meaningful rally
    28 Dec 2012, 12:39 AM Reply Like
  • Lynum21
    , contributor
    Comments (4) | Send Message
     
    I love my Lumia. Long NOK. Great name, and great product. Can't wait to see China sales results.
    28 Dec 2012, 04:35 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector