This week Nokia reported net sales of €5.6 billion in Q2 2017. Even though it was flat year-on-year, Nokia Technologies’ sales were up 90% versus the same period last year, which was largely driven by its recently-announced agreement with Apple.
Apple paid Nokia an upfront cash payment of €1.7 billion ($2 billion approx.) as a part of its patent settlement that was announced in May, as it had confirmed earlier. Nokia said that it will provide more details on the intended use of cash in conjunction with its Q3 earnings.
Earlier this month the company signed a deal with Xiaomi to cross license cellular standard essential patents, and Xiaomi also acquired patents from Nokia. In addition, the two companies expanded their business collaboration, including sales of network infrastructure equipment by Nokia to Xiaomi. Nokia said that it expects to start recording licensing income from Xiaomi beginning from Q4.
Regarding the Apple deal, Kristian Pullola, CFO of Nokia, during the conference call said:
Instead of a simple patent licensing agreement, we have agreed on a more extensive business collaboration with Apple, providing potential for a meaningful uplift in our IP Routing, Optical Networks and Digital Health business units over time. Hence, the value of the agreement will be reflected partly as patent licensing net sales in Nokia Technologies, and partly as net sales in other Nokia business groups.