In perhaps as little as a few weeks, Nokia as we know it will cease to be.
After agreeing to sell its devices and services unit to Microsoft in a deal worth €5.4bn, Nokia is set to be divided into two: the handset unit will become part of Redmond when the deal closes later this year, while the rest of Nokia's non-handset assets will carry on as a separate company.
That business will still bear the Nokia name and will be headquartered in Finland but it'll be a very different beast to the Nokia that's been a mainstay of the mobile market for over two decades. Under the terms of its deal with Microsoft, Nokia can't make mobile handsets for at least another two years.
Without its devices unit, Nokia will be comprised of three separate businesses: its networking unit NSN, the mapping business Here, and a third element — everything else including patents and research. This third unit will be rolled up under the banner of Advanced Technologies, and staffed by around 600 Nokians.
Nokia execs are now working on the future shape and direction of Nokia after the deal closes, expected sometime this quarter.
Henry Tirri, Nokia's CTO, is among those charged with working out where the company should place its bets post-Microsoft.
"In my current life, I have two different worlds — the pre-closing world and the post-closing world. In my day job, I'm still the CTO of the current Nokia, which is then owning research, advanced engineering, standardisation, some special projects that we are doing, some platform assets," Tirri told ZDNet at the Slush conference in Helsinki late last year. "Then of course, there's post-closing, so I'm also working on the strategy for the new Nokia."
The new Nokia
The unit that Tirri now works on, the CTO office, will become what he calls one of the "backbones of Advanced Technologies". The research-focused CTO office has traditionally contributed around two-thirds of the intellectual property that Nokia generates every year, and that work will continue when it's rehomed.
A key focus for the unit will be radio technologies — the things that once underpinned Nokia's mobile empire — but the company is also turning its R&D eye on non-cellular types of connectivity too. Sensor technologies, imaging, audio and cloud are also on the new Nokia's R&D horizon.
Tirri envisions tomorrow's technology as today's, but pumped up: everything connected (hence the radio research), everything digitised and updated in real time (hence the cloud), and everything larded with tech to make it aware of its environment (hence the sensors).
While it may not be making the mobile devices that populate this future mobile world, Nokia hopes its patents will still be at work within them.
Patents currently make around €500m a year for Nokia, and the company said recently it will aim to derive greater revenue from its portfolio of thousands of patents, by signing up new licensees for existing patents, and licensing out those that had previously been withheld from the market at large to help Nokia's handset business.
This emphasis on patents has already caught the eye of the European Commission with competition commissioner Joaquín Almunia saying recently: "Since Nokia will retain its patent portfolio, some have claimed that the sale of the unit would give the company the incentive to extract higher returns from this portfolio... If Nokia were to take illegal advantage of its patents in the future, we will open an antitrust case — but I sincerely hope we will not have to."
There have even been those who have suggested that with no hardware arm and a heavy reliance on patents for revenue, the company will effectively end up a non-practising entity (NPE) — the polite term for a company whose only business is patent trolling.
It's a charge Tirri refutes, saying that the fact that Nokia will retains Here and NSN alone would mean the company couldn't be a troll. Aggressively milking its existing portfolio is "not a very sustainable, or a very wise, business. Yes, we have a young patent portfolio, so for next ten years, we can utilise two-thirds of patents, but still, it's not a sustainable business", he added.
"I don't envision us buying patents and then selling them. Considering the amount of patents we have, I don't think we have any need to go anywhere else. Of course, we might want to occasionally work in licensing mode where we want to help a company or a partner that would not have such IP protection, but that's business as usual — it's very easy for me to see these are different things."
Licensing of technologies, rather than purely licensing patents, is more likely to figure in Nokia's future — where it researches and develops products at the behest of customers, who then license the technology from Nokia.
"Our R&D is heavier than many of the other licensing companies that are not looked at as trolls, the ARMs and others — we would be very equivalent to them," Tirri said.
The future of hardware
At the Slush conference, Nokia gave a taster of what we might see from the company in the next couple of years.
Staff from Nokia's research centre demoed projects including a product called Wireless Fast Flow which would allow users to automatically broadcast content from their phones straight to the nearest display, and an older project, Kinetic UI. Designed to work on a flexible device, the user interface would let smartphone owners control their device by bending it — zooming out from a photo by bending the sides of the device away from them and zooming in with the reverse gesture, for example.
Hardware was once a source of differentiation for Nokia and its rivals. Now, mobile hardware seems to come in a single variant across the board, a shiny rectangle: can hardware regain its former importance, particularly in the world Nokia and others envision where all the intelligence, storage, and processing power comes from the cloud, rather than the device itself?
"Taking the things which are sitting here [on a mobile device] and putting it in the cloud allows you to have form factors that you couldn't have before, because you don't have to physically put the memory or computing stuff in there. That means the hardware, the form factors, will diverge like crazy because you don't need to always be constrained by the physical resourcing you need to do," Tirri said.
But if the technology doesn't constraint the form factor, our own hard-to-change habits might: Tirri, a former professor of AI, suggests that the reason there are generally only two sizes of tablets is that we struggle to get used to new form factors.
"Why don't you see tablets that are different sizes? You have a tablet which is magazine size and a paperback size — that's because of our usage habits. You could have a tiny tablet, a whatever size tablet."
Why don't we have that whatever sized tablet? Because the inherent mental laziness of humans means we tend to prefer form factors — the magazine, the paperback — that we're already used to.
The reason why other form factors that are familiar from the offline world — the watch, say, or the flexible screen — haven't caught on in their mobile hardware incarnations is simply because they're not bringing anything more to the party than the object they're seeking to replace, often just serving to replicate the functionality of another device wholesale.
"I still believe that, for lazy brains, there has to be some super-good benefit of using [a piece of hardware]... I personally am not interested in the watch form factor messaging device, but other people are. My main point is more that the wearables that people are talking a lot about are still accessories to another device. I'm much more interesting in devices which are augmenting my life, my senses, etc by themselves."
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