Nokia is continuing its aggressive play for the massive Chinese market by announcing a new deal with handset maker Xiaomi.
The Chinese company will license Nokia’s mobile patents and purchase telecom equipment from the Finnish company for an undisclosed sum. While the financial impact may not be immediately clear, this latest deal follows a flurry of announcements Nokia has made over the past week about its pursuit of the Chinese market.
As Nokia continues its turnaround, the telecom company is placing a big bet on its future in China, where Xiaomi is just the latest catch.
“Xiaomi is one of the world’s leading smartphone manufacturers, and we are delighted to have reached an agreement with them,” said Rajeev Suri, president and CEO of Nokia, in a statement. “In addition to welcoming such a prominent global technology company to our family of patent licensees, we look forward to working together on a wide range of strategic projects.”
Many of the announcements are being made at Mobile World Congress Shanghai 2017. While Nokia has operated in China for years, the company clearly believes it has a massive opportunity there that it hopes to now seize.
On June 29, Nokia announced it had created a new business unit to focus on helping “Chinese internet firms expand overseas.” That business unit would provide things like data centers and cloud services.
A few days later, Nokia signed an agreement to create a joint venture with China Huaxin Post and Telecommunication Economy Development Center that melds their equipment businesses in Shanghai. The company also announced a deal to provide equipment for Shanghai’s smart city programs and a digital health partnership with China Mobile.
In the latest move, Nokia will also cross license Xiaomi’s mobile patents.
The licensing deals are a strategic cornerstone for Nokia as it seeks to reinvent itself following a decision several years ago to sell its handset business to Microsoft. Nokia created a unit within itself called Nokia Technologies, which technically holds the patent portfolio the company built up over decades.
Nokia takes the money it gets from licensing those patents and uses it to fund new product development and, in some cases, acquisitions of businesses such as Withings, which moved Nokia into the digital health space.
Nokia Technologies also recently hired Gregory Lee to be its new president. Lee had held various roles at Samsung since 2004 but had served as CEO and president for the company’s North America division since 2014.