Nokia - Challenges with Open Innovation

Topics: Smartphone, Nokia, Mobile phone Pages: 14 (2207 words) Published: June 10, 2014

April 2014

Challenges of Open Innovation
Team Assignment

Table of Contents

1. Cooperation forms and IP management
First of all, we will give a short overview of Nokia’s history and look at the business alliances and IP management procedures that were established by Nokia from 2008 until now. Thus giving you a general understanding of Nokia’s past operations in the market of tablets and also a general idea of the smartphone market (because they are strongly interconnected). Finally, IP protection methods and current legal issues in relation to IP management are addressed. 1.1. Cooperation Forms

1.1.1. Acquisition

Figure : Nokia Acquisitions 2008/2009, Source: Nokia
This figure shows the target companies of Nokia in 2008 and 2009 – with nine acquisitions Nokia was quite an aggressive investor in those years. We will take a closer look at the three most important ones: 1. NAVTEQ: Leading provider of comprehensive digital map information 2. Symbian: Software Company that develops and licenses Symbian OS, the market-leading open operating system for mobile devices. 3. Plum: Develops and operates a cloud-based social media sharing and messaging service for private groups As the acquisitions show, Nokia is following a strategy to acquire Wholly Owned Subsidiaries, which gives them full control over the companies operations but also leaves them with all the risk. The acquired companies all have know-how in complementary fields to Nokia’s products. Especially, Symbian is basically a monopolist for phone operating systems, which offers potential for licensing. Interestingly, Nokia acquired Plum in 2009 for cloud-based social media, which is rather late considering Facebook appeared in 2004 already. In the next three years Nokia gradually decreased its acquisition strategy from 2010 on, probably because they started to concentrate on their core competencies due to bad financial years. Here the most important ones are the latest: 1. Scalado: Mobile Imaging

2. earthmine, Inc.: 3D Map Making
3. NSN: World's specialist in mobile broadband

Figure : Nokia Acquisition 2010-2013. Source: Nokia

1.1.2. Strategic Alliance (Microsoft)
In 2011, Nokia entered its most important partnership with Microsoft, at first to challenge Apple and Samsung in the smartphone market1. Those were bad times for Nokia’s phone division. Admittedly, they were the first ones to introduce the concept of smartphones, however, they were also the last ones to earn profits off of the huge market. You can see that the mobile phone sector of Nokia in 2011 is suffering from negative growth rates in the double digits in the graphic on the left. The plan was to release future phones with the Windows Phone 7 operating system but also stretches across Microsoft products like Xbox Live, Bing and Office. Ovi Maps were integrated with Bing and became a central part of Microsoft’s mapping services, while Nokia’s Ovi Store content was integrated into Microsoft’s app-store. Nokia seeks to innovate by pursuing state of the art camera technology, something they have been good with. After good cooperation Microsoft decided to acquire Nokia’s phone unit in 20132 but did not integrate Nokia into the corporation but let the brand survive. This also means that Nokia is left with most of its Intellectual Property and is only licensing its know-how to Microsoft. The CEO of Nokia, Stephen Elop, stepped down and took a position as Vice-President for Devices & Services3. The deal cost Microsoft USD 7.2 Billion (5 Bill. for phone unit and 2.2 Bill. for licensing fees) 1.1.3. Research cooperation

The Nokia Research Center is actively engaging in open innovation and entering research cooperations with leading universities around the world to foster knowledge transfer and to create a win-win situation as stated on the website: “By sharing resources, leveraging ideas, and tapping each other’s expertise we are able...
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