Announcing that an arbitrator had ruled in its favor, Nokia said: “It found that RIM was in breach of contract and is not entitled to manufacture or sell WLAN products without first agreeing royalties.”

Nokia, which is trying to boost its royalty income as its phone business tumbles, said that it had filed cases in the United States, Britain and Canada to enforce the arbitrator’s ruling.

“This could have a significant financial impact, as all BlackBerry devices support WLAN, although the volumes are currently very low in these countries,” IDC analyst Francisco Jeronimo said.

RIM was not immediately available to comment.

Nokia said it signed a cross-license agreement with RIM covering standards-essential cellular patents in 2003; a deal that was amended in 2008. RIM sought arbitration in 2011, arguing that the license should be extended to cover WLAN patents.

Nokia, along with Ericsson and Qualcomm, is among the leading patent holders in the wireless industry. Patent royalties generate annual revenue of about 500 million euros ($646 million) for Nokia.

Based on a Nortel patent sale and Google’s acquisition of Motorola Mobility, some investors and analysts say that Nokia’s patent portfolio alone merits its current share price of 2.50 euros.

However, the patent market has cooled since those deals were made and industry experts say that fair value of patents in large portfolios is $100,000 to $200,000, pricing Nokia’s portfolio at up to 0.50 euros per share. ($1 = 0.7733 euros)

(Editing by David Goodman)

Silicon Valley-based start-ups raise, on average, a third
more capital than those in other areas, the report, conducted by
research firm Startup Genome and funded by Spanish group
Telefonica, said.

Silicon Valley continued to lead in metrics including the
amount of serial entrepreneurs, revenue models, and the level of
education among business founders. Tel Aviv was ranked second,
followed by Los Angeles, Seattle, New York and Boston.

“Some years ago it was only Silicon Valley. Now there are
also other innovation hubs and this trend is only going to
strengthen,” said Gonzalo Martin-Villa, chief executive of Wayra
- a Telefonica unit that nurses start-ups.

“Flourishing communities in Latin America, Europe, the
Middle East and Asia have grown considerably over recent years
and are now beginning to challenge Silicon Valley’s domination
in technology innovation,” the report said.

Phil Liblin, chief executive of Silicon Valley-based writing
app maker Evernote, said in a recent interview: “Silicon Valley
does have a lot of magic in it. It is still the only place you
can get $20 million without owning a suit, but you do not need
20 million any more.”

The proliferation of Apple and Google app
stores, Facebook and Twitter have enabled starting a
global company with just $50,000 or $100,000, he said.

“I think the main structural advantages are disappearing.
Silicon Valley’s greatest innovation in the last couple years
have made itself less unique.”

The wireless research group at Virginia Tech in Blacksburg,
Virginia, said in a letter to the U.S. Department of Commerce
that it found “extremely effective attacks can be realized,
using fairly low complexity.”

The Virginia Tech researchers warned the U.S. National
Telecommunications and Information Administration (NTIA) that if
the newer LTE networks are used by public safety officials they
could become targets of terrorists or criminals.

The group is conducting research into the security of
networks based on Long Term Evolution (LTE) high-speed
technology, a newer technology used to transmit high-speed data
on mobile phones.

The Virginia Tech researchers were responding to a request
for comment from the NTIA, looking into future public safety
networks.

“It is very possible for radio jamming to accompany a
terrorist attack, for the purpose of preventing communications
and increasing destruction. Likewise it is possible for criminal
organizations to create mayhem among public safety personnel by
jamming,” the researchers said in the letter dated Nov. 8.

Leading network equipment maker Ericsson said it
may be possible to limit the effect of such attacks, and a U.S.
industry group said LTE was just as secure as older wireless
technologies, in response to the early findings from the
research group.

Ericsson, the world’s largest mobile network equipment
maker, said the structure of network technology would limit the
impact of any jamming attack trying to overwhelm a carrier’s
base station.

A senior cyber security expert with CTIA, a U.S. trade group
for wireless telecommunications providers, said it has long
been possible for attackers to interrupt communications by
interfering with signalling systems, regardless of whether they
are using LTE or another wireless technology.

“In LTE, the security architecture is as good or better
(than) you see with 3G networks,” said John Marinho, vice
president of cyber security and technology for CTIA.

“It’s illegal. There are laws,” said Marinho.

The CTIA’s biggest members including Verizon Wireless, AT&T
Inc, Sprint Nextel Corp and T-Mobile USA are all
upgrading their networks with LTE technology.

Verizon Wireless is a venture of Verizon Communications
and Vodafone Group Plc, and T-Mobile USA is owned
by Deutsche Telekom.

Ericsson the largest maker of LTE network equipment ahead of
Nokia Siemens Networks and Alcatel-Lucent
, said that all wireless systems with a limited amount
of airwaves – including radio, broadcasting, WiFi and current
national safety systems – are at risk of jamming attacks.

“However, since cellular base stations are placed at a
regular distance from each other, cellular systems have an
inherent resilience to how large a geographical impact a jammer
can have,” the Swedish firm said, adding the distance between
base stations is low in densely populated areas.

“Even if a jammer can bring down the service level in single
cells, it will not affect the whole network of surrounding
cells,” Ericsson said in a statement.

The cellphone giant, which once made more than half the world’s smartphones and 4 percent of Finnish GDP, funded an award won by Rovio, now one of the world’s two leading mobile gaming firms along with local rival Supercell, which next week opens a new HQ at former Nokia premises near central Helsinki.

In an industry where many are chasing but few make serious money, Rovio’s Angry Birds game hit the big time with a billion customers around the world, most of them using smartphones of Nokia’s deadly rivals Apple and Samsung.

Last weekend its new Star Wars version of the birds game took top spot in global download charts from Supercell, which had led for weeks with strategic battle game Clash of Clans.

With Nokia expected to report net losses of nearly 5 billion euros for 2011 and 2012, and its smartphone market share now below 5 percent, the gaming firms offer promise that Finland will retain its place at the technology table.

Though they have a long way to go before they fill a Nokia-sized hole, they could help prevent a brain-drain of technology graduates.

“It’s clear that the direct impacts of startups and gaming firms are not even close to what Nokia still is, let alone what it was,” said Petri Rouvinen, researcher at think-tank ETLA. But in the long run they are “necessary for structural change” in an economy, driving entrepreneurship and creating new growth, he added.

Finland’s economic growth is expected to be less than 1 percent in 2012 and little more than 2 percent thereafter, as on top of Nokia’s problems, its other major export, forestry products, is in decline.

“We don’t need a new Nokia, to be totally dependent on one company. Instead we need a couple of hundred Rovios or Supercells,” said Christoph Thur, founder and chief executive of small gaming firm Ovelin, one of the first to bet on a rising trend of apps combining education and entertainment.

Ovelin employs only 12 people, but its guitar-teaching game WildChords has hit the top spot in music charts in 34 countries, as app stores give it instant global reach that earlier generations of startups could only have dreamt of.

Many of the Finnish firms are riding the free-to-play model that lets gamers try before they buy, making life tough for physical game product makers such as Electronic Arts, Activision Blizzard and Take-Two Interactive Software, whose sales are falling.

ANGRY BIRDS

Even the most successful of them remain of modest scale. Rovio employs nearly 500, just a tenth of the people Nokia laid off over 2011 and 2012 in Finland, where it still employs 6,500.

But Nokia’s woes could be a case of creative destruction.

“Nokia employees used to stay with Nokia and avoid risky ventures, creating an insular bubble of tech expertise that did not foster startup growth in Finland,” said analyst Tero Kuittinen from mobile analytics firm Alekstra.

“Finland’s start-up evolution must now run at an accelerated rate to mop up IT and marketing experts from the labor pool,” Kuittinen said.

Marketing experts are a key part of Rovio’s success story as the firm has expanded its one-hit brand beyond games. Last year it made 30 percent of its annual revenues of $100 million from merchandising and licensing.

“We have been consistently building Angry Birds as a brand, much stronger than the game itself,” said Petri Jarvilehto, games chief at Rovio.

Local research firm Neogames forecasts Finnish gaming software sales of 250 million euros this year, two and a half times what they were two years earlier, an estimate made before Supercell revealed its 58 staff generated daily sales of $500,000 in October.

That kind of growth has made Helsinki the industry hub.

“If you want to make games for tablets and smartphones, this is the centre of the universe,” said Supercell founder Ilkka Paananen.

It attracts big names like Disney, which last year bought local startup Rocket Pack, to get access to technology that enables developers to make games for different platforms, and French games publisher Ubisoft, which bought RedLynx gaming studio, known for its Trials driving games.

In September EA opened its own studio focusing on a mobile version of its hit life-simulation strategy game The Sims, once the bestselling PC game in history.

“We feel that the talent base in Finland will be a strong complement to our existing mobile expertise based around the world,” said Lucy Bradshaw, General Manager of EA’s Maxis label.

The sector is expected to employ 1,500 people in Finland this year, up from 1,064 in 2010.

Nokia, which paid just 150 euros to the Finnish tax man last year, compared with 1.3 billion euros for 2007, in its prime supported an eco-system of suppliers, which are now suffering.

Electronics company Elcoteq filed for bankruptcy last year as Nokia turned to cheaper Asian suppliers. Of key suppliers, casing maker Perlos was bought by Taiwan’s Lite-On Technology Corp, while Digia and Elektrobit have cut jobs after making losses.

The gaming firms can’t turn back that clock, but they might soon eclipse Nokia in valuation terms.

Alekstra’s Kuittinen has valued Rovio at $6-9 billion, based on expectations of fivefold sales growth this year to $500 million and a 12-18 times multiple. That’s only just short of Nokia’s current market capitalization of nearly $10 billion.

(Reporting By Tarmo Virki; Editing by Will Waterman)

It has tried the Ratemizer app in Finland since last month, with a few thousand users finding that they overpaying on average by 35 percent as they usually underestimate call volume and overestimate texting volume.

“Many consumers calibrate their mobile plans for their median monthly voice minute volume. However, they tend to have 2-3 peak months with far higher volume – and this typically leads to stiff overage fees,” said Alekstra’s founder Toni Toikka.

Texting volume has declined on average by 14 percent over last 10 months as the amount of iPhones has increased in the homeland of Nokia, former smartphone market leader, and traffic is redirected to Apple’s own iMessage system.

“One surprise to us has been how much certain consumers overestimate their SMS and mobile data usage,” said Toikka, adding many consumers were likely increasingly using local WiFi networks, which has left them with outsized data plans.

Consumers have to log in to their carrier portal through the app, which then analyzes the last 12 months billing data and picks the best among hundreds of possible mobile plans.

In Finland, most consumers can reach more than 15 percent savings by changing plans within their current carrier, even though the cheapest plan is usually with a rival operator.

Alekstra has said it plans to step up its challenge to traditional operators in 2014 by launching a mobile virtual network business, offering calling services without roaming fees in key markets around the globe.

Before its launch, it aims to raise some tens of millions of euros from venture capital firms.

As a virtual operator, it will rent airtime from existing networks, but the investment needed is a fraction of what global incumbents like Vodafone or Telefonica have invested in building out networks from scratch.

(Reporting by Tarmo Virki; Editing by Marguerita Choy)

(Reuters) – Mobile satellite navigation startup Waze launched a global advertising platform on Wednesday, targeting its 30 million users based on their location.

Waze, founded in 2009 in Israel, uses satellite signals from members’ smartphones to generate maps and traffic data, which it then shares with other users, offering real-time traffic info.

The quality of data improves as more drivers join the network and use it. The number of users has jumped to 30 million from just 7 million 12 months ago.

Smartphone users can use Waze’s service for free and it aims to make money from ads of local merchants and big brands by attracting mobile customers on the road nearby.

Location-based advertising is often seen as a massive opportunity the mobile industry, but so far worries over privacy have hampered its growth.

Waze gets around this by displaying its information from drivers anonymously, with a delay, although members can choose to identify themselves if they wish.

“Waze is right to start building up location based advertising, but it shouldn’t have inflated expectations. This is a busy and confusing field, and many advertisers will stick with the big brand players, such as Google and Facebook,” said analyst Martin Garner from British consultancy CCS Insight.

Waze says it saw a jump in downloads of its app after Apple Chief Executive Tim Cook, in an unusual move after the launch of iPhone 5, suggested that customers download rival mapping services like Waze while Apple improves its own maps.

While other satellite navigation providers help drivers find the way to sites they do not know – something a typical driver needs on a holiday or in a new town – Waze aims to save drivers time on their usual routes by suggesting faster, alternative ways.

Waze sees Google Inc as its most direct rival, but in the larger navigation market it also competes with TomTom, Nokia, Garmin and Telenav.

Waze has raised a total of $67 million from investors such as top venture firm Kleiner Perkins and Hong Kong tycoon Li Ka-shing. (Reporting by Tarmo Virki; Editing by Richard Chang)

The company cautioned, however, that the economic slowdown
could hurt growth in coming quarters.

F-Secure said third-quarter operating profit rose 25 percent
to 8.6 million euros ($11 million), beating all forecasts in a
Reuters poll, while sales grew 7 percent to 39.1 million euros
to meet forecasts.

Shares in F-Secure – which are down 12 percent this year as
investments into building up its data storage Content Cloud unit
have weighed on profits – rose 1.8 percent to 1.76 euros.

“Due to the global financial uncertainty we are facing some
slowness in decision making, especially in the Content Cloud
business,” chief executive Christian Fredrikson said in a
statement.

“This leads to longer sales cycles, and revenue growth in
the coming quarters is expected to remain at a modest level.”

The company also said it would halt development of an old
product at its data storage unit and cut up to 50 jobs at its
French unit, booking up to 2 million euros of charges in the
fourth quarter.

F-Secure – which competes with larger rivals Symantec
and Intel’s McAfee – said it sees 2012 annual
sales growth of 5-10 percent and operating profit margin,
excluding one-offs, around 15 percent.

Overnight, Symantec reported results ahead of Wall Street
expectations as its new chief executive took direct control of
the company’s sales force to turn the firm around.

($1 = 0.7711 euros)

(Reporting By Tarmo Virki; Editing by Ritsuko Ando and
Hans-Juergen Peters)

Tieto, which competes with bigger technology services
companies such as Accenture and IBM, is aiming
to boost its operating profit margin as part of a revamp under
new Chief Executive Kimmo Alkio as the euro zone debt crisis
clouds the outlook for its customers.

Shares jumped on the report and were 10.5 percent higher at
14.90 euros by midday. Shares in the company have risen around
35 percent so far this year, valuing the firm at 1.06 billion
euros ($1.39 billion).

Tieto reported quarterly operating profit excluding one-offs
rose 8 percent to 37.1 million euros, beating all analysts’
forecasts in a Reuters poll.

Tieto said profit was boosted by a 7 million euro drop in
subcontracting costs.

“The result is very good, and it shows that the company has
been able to adjust its cost base despite client behaviour and
changes in demand,” said Evli analyst Mikko Ervasti.

Sales grew 2 percent to 423.5 million euros, also beating
all forecasts, which ranged from 393 million euros to 420
million euros.

Full-year operating profit, excluding special items, was
expected to rise more than 10 percent, Tieto said, having
previously not specified growth.

Tieto aims to reach a 10 percent operating profit margin by
2016. So far this year its underlying operating profit margin
stands at 6.9 percent.

Rival Atos, which will report this Thursday, is
targeting 2012 operating margin rising to 6.5 percent of revenue
from 4.8 percent in 2011 on a proforma basis. Capgemini
has forecast its margin to improve from 7.4 percent
last year.

Tieto said it does not expect its sales to grow this year
and warned “the overall IT services market may reflect
cautiousness at the beginning of 2013″ due to weak economies.
($1 = 0.7651 euros)

(Reporting By Tarmo Virki; Editing by David Cowell and Louise
Heavens)

Bloomberg reported earlier that STMicro could split up its analog and digital businesses, as well as selling its struggling mobile-phone chip venture with Ericsson (ERICb.ST: Quote, Profile, Research, Stock Buzz), although no decision had been made.

STMicroelectronics is looking at options for the loss-making ST-Ericsson venture.

Samsung Electronics (005930.KS: Quote, Profile, Research, Stock Buzz) could buy STMicro’s digital assets along with ST-Ericsson, enabling STMicro to focus on its semiconductors business, the news agency said.

“STMicroelectronics denies the existence of initiatives which can compromise the unity of the company,” STMicro said in a brief statement. An STMicro spokesman declined to elaborate on the statement.

Samsung said the “rumors are groundless”, according to Bloomberg. Samsung Europe was not immediately reachable for comment.

The group is preparing to unveil a strategic plan in December to address softer demand and the changing needs of its customers.

On Tuesday, STMicro and Ericsson said they had hired an adviser to review strategic options for ST-Ericsson. They did not mention a sale or breakup of the firm, but Ericsson’s head of media relations said all options were being looked at.

A source familiar with the situation identified the advisor chosen for the ST-Ericsson strategic review as JPMorgan.

Shares in STMicro, which rose as much as 19 percent after the Bloomberg report, pared gains after the company statement to close 6.4 percent higher at 4.673 euros in Paris, leaving the company with a market capitalization of 4.1 billion.

The U.S.-listed shares (STM.N: Quote, Profile, Research, Stock Buzz) were up 7.8 percent at $6.08 at 1557 GMT.

JPMorgan analyst Sandeep Deshpande said the shares had risen on hopes of splitting the analog and digital businesses as the former were funding losses at the latter.

“If the two assets were separated, then the analog assets would find a much higher value due to their profitability,” Deshpande said.

“The investor hope is that a trade buyer would then fund the losses associated with the digital assets and they would not be borne by STMicro investors.”

VENTURE LOSSES

STMicro makes chips for everything from TVs and PCs to printers, smartphones, hybrid electric vehicles and medical imaging devices.

The group said last month it would reveal in December a plan to speed up its adoption of a new financial model, “taking into account the changed market environment and some specific customer dynamics”.

STMicro, which competes with Analog Devices Inc (ADI.O: Quote, Profile, Research, Stock Buzz) and Texas Instruments Inc (TXN.O: Quote, Profile, Research, Stock Buzz), had said in July that the global economic environment had weakened.

The ST-Ericsson joint-venture made an operating loss of $235 million in the second quarter as it continued to suffer from the collapse in demand for phones from clients Nokia (NOK1V.HE: Quote, Profile, Research, Stock Buzz) and Sony Mobile and a shift to supplying chips for smartphones rather than older feature phones.

The joint-venture lost $841 million on sales of $1.65 billion last year and has lost about $2 billion in its three years of operation.

“Any move that would shed ST of ST-Ericsson would be the right one, in our opinion, as the money-losing venture continues to weigh on ST’s overall profitability,” Morningstar analyst Brian Colello said in a research note, adding that he was keeping his “fair value” estimate of 5 euros a share.

STMicro, which is 27.5 percent held indirectly by France and Italy, has about 50,000 staff worldwide and posted 2011 sales of $9.73 billion including ST-Ericsson.

(Additional reporting by Blandine Henault and Blaise Robinson in Paris, Valentina Caiazzo; in Milan and Sophie Sassard in London; Editing by David Holmes and Jane Merriman)

The two industry giants were the only companies among the top 10 cellphone makers to have won market share last quarter, due to the strength of their smartphone brands – Galaxy and iPhone – the poll of 40 equity and telecoms market analysts showed.

“The quarter will probably become a milestone for those phone makers striving to survive,” IDC analyst Francisco Jeronimo said.

“It will expose the weakness of their performances compared to the mammoths of this industry, Apple and Samsung, which are expected to publish stellar results following the launch of the iPhone 5 and the success of the Galaxy SIII.”

Samsung was expected to have sold 55 million smartphones in the quarter, compared with Apple’s sales of 26.6 million iPhones, benefiting from its broad range of smartphones.

Apple’s late-September launch of its iPhone 5 dented sales of the older version. A ramp-up in production and sales of the new model will likely help narrow the gap with Samsung i n the fourth quarter, analysts said.

Among the 10 largest cellphone makers, sales at HTC, LG Electronics and Research In Motion are expected to fall more than 30 percent from a year ago, despite overall market growth.

Gartner analyst Carolina Milanesi said many of these large cellphone makers were struggling to stand out as they are squeezed by Apple and Samsung at the high-end of the market and by Chinese phone companies at the lower end.

“They are suffering because they do not have a differentiated offering and a strong enough brand,” she said.

The poll showed ZTE and Huawei were both expected to be among five largest cellphone vendors next year, illustrating the growing clout of Chinese companies.

In the cellphone market as a whole, including basic cellphones, Samsung is expected to continue to extend its lead over Nokia after it ended Nokia’s 14-year reign as the world’s largest in the first quarter. Samsung is estimated to have sold 100 million phones in the third quarter.

Nokia, now global No 2, was expected to report a sharp fall in phone sales from a year ago as its new Windows Phones are yet to compensate for falling sales of legacy products.

(Reporting By Tarmo Virki. Editing by Jane Merriman)