Nokia's shares drop following patent ruling versus Samsung

Nokia's patent dispute against Samsung has ran the Finnish company's stock price to the ground, Bloomberg reported on Monday.

According to the report, the Arbitration court of the International Chamber of Commerce settled the amount of money Samsung needs to pay Nokia for using its patents, and the figure sits at €200 million (£151.9m), while market analysts predicted as much as €250 million (£190m).

That resulted in Nokia's shares dropping a stunning 13 per cent, which is its biggest fall since April 30. Nokia has lost about 4 billion euros in its market value, Bloomberg says.

With the market becoming more and more saturated with high-end smartphones, equipment makers will try to squeeze out as much as they can from smartphone manufacturers. Market analysts believe smartphone shipments and sales will suffer the same fate as tablets.

IDC expects the growth of smartphones shipped to drop by 50 per cent in the coming years. "Growth will slump to 4.7 per cent in 2019, compared with estimated expansion of 9.8 per cent in 2015 as sales in emerging markets decelerate,” Bloomberg explains.

"You’ll only see more margin pressure in this industry in coming years, so companies like Samsung would like to try and defend against that and probably be more aggressive in a negotiation process or even in arbitration where they have to present their case," said Janardan Menon, an analyst at Liberum Capital Ltd. in London.

In a note he wrote to clients, Menon says Nokia’s award is "well below consensus and broader expectations in the market.”