Tomahawk, WI 04/22/2014 (Basicsmedia) – The sale of Nokia Corporation (ADR) (NYSE:NOK) to Microsoft Corporation (NASDAQ:MSFT) is winding its way through regulatory approval processes and other issues. Meanwhile, Microsoft has announced that the devices and services segment of Nokia will be known as Microsoft Mobile once the $7.2 billion deal is completed.

Nokia Lumia and Asha phones will therefore be known as Microsoft Lumia and Asha phones in due course.

Regulatory Issues

While regulators in the U.S. and E.U. have approved the takeover of Nokia’s Devices & Services Division by Microsoft, Asian regulators are taking their time. Chinese regulators have however recently approved the takeover. There are likely to be no regulatory hurdles in India either — the only problem remaining the tax dispute with the Indian authorities which is going through the Indian court system.

Windows Phone

High-end Nokia Lumia smartphones with Windows Phone OS should bring in good numbers (up to 50 million) for Nokia’s D & S division. The launch of the Cortana Virtual Assistant in Windows Phone 8.1 will boost sales.

Nokia X

The Android based Nokia X phones will sure be hot sellers in the burgeoning smartphone market all across the developing world (China and India in particular where Nokia has a strong brand value) and has already pushed Google Inc (NASDAQ:GOOG) to come up with a sub-$100 Nexus phone.

Nokia Patents

While Microsoft will pay Nokia $2.18 billion to license its patents, Nokia will still retain much of its patent portfolio. For the remaining part of Nokia, patents will be a key part of generates value for Nokia. Nokia Corporation (ADR) (NYSE:NOK) currently earns about $690 million in royalty income every year. After the Microsoft deal is done, Nokia’s licensing revenue is expected to rise to $828 million per year.

Nokia’s royalty rate at present is less than 0.3% compared to 3.3% for Qualcomm. So, there is scope for Nokia to increase its rates when it renegotiates its existing deals. Nokia already generates hefty licensing revenues from smartphone giants Apple Inc. (NASDAQ:AAPL) and Samsung.

Solutions & Networks

Nokia Corporation (ADR) (NYSE:NOK)’s infrastructure business is likely to do well this year. While Nokia’s Solutions and Networks division revenue declined last year by 18%, it was atypical and was on account of some headwinds in the GSM and other businesses. This year, mobile operators are spending more in capital expenditure across China and Western Europe which augers well for Nokia.

Even in the U.S., Nokia might grow its business with a contract with Sprint Corporation (NYSE:S).

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