Of course, patents are being written now. But all the so-called heavy lifting is still ahead. Others also need to be convinced of these ideas. In 3GPP, various device manufacturers are also parties, heavily involved in that RAN work. Operators are also strongly involved in 3GPP, even though they also operate through GSMA.
Can 3GPP be bypassed? Of course, but some of us are old enough to remember what farces e.g. cdma2000 and WiMax were
After 2030, we’ll still be waiting, chicken-and-egg style, to see if 6G networks or 6G devices come first. After that, it will take a few years to push the price point of devices down low enough for penetration to grow properly.
I’m just trying to say that this Nokia+NVIDIA 6G AI is pretty much dreaming. Only in the 2030s will we see who wins and what the killer feature of 6G is.
I’ll add that various “6G demos” will probably be seen in the coming years, but they are mainly experiments.
This discussion is now entirely focused on those mobile networks. It is even an irrelevant topic for the present, to put it somewhat hyperbolically. I myself believe that development will accelerate so that the first 6G networks will appear in 2028 or 2029. Those 2029 dates have been indicated, for example, by Nokia even before this larger AI surge.
The same, by the way, happened with 5G networks. The first setups were made roughly before the standard was finalized.
IP and Optical networks are now largely Nokia’s future. And yes, fixed networks are accelerating well. By the way, about 5 years ago, Lundmark already stated that IP networks generate a mid-teens operating profit percentage. It is unlikely that the level has deteriorated or is heading in a worse direction for the market leader. Optical networks were making zero profit at that time. After the Infinera synergies and significant growth in scale, I believe we are already around a double-digit operating profit percentage. And in fixed networks, Nokia is absolutely number 1. This is a really strong overall package.
Edit: I saved these guiding words from Lundmark from the reset period, I think it was 2020. I think now is a good time to publish this snippet - from which the current Nokia began to be charted.
The target freeze for the protocol side is at the end of 2027, and there are no networks before that. I am skeptical that this could be significantly accelerated, and whether operators would even have the willingness to do so. So, in that sense, I disagree. In my opinion, the real opportunity could be on the data center side if growth could emerge from somewhere soon.
Quite good analysis from OP. And an interesting, slightly different perspective on the software side development.
Juuso Kenkkilä, Head of Equity Investments at OP Pohjola, mentioned three things in the live broadcast of Talousaamu on Wednesday that he considers most significant in the deal.
Nokia and Nvidia announced on Tuesday evening that Nvidia would invest a billion in Nokia, becoming the company’s second-largest owner. According to Kenkkilä, Nvidia can now, through the deal, spread AI applications to network operators’ base stations.
“Through this, AI is brought closer to the user, wherever they are in the world. Nvidia has not had a clear path on how to globally capture operators all at once. Now that problem was solved in one fell swoop,” Kenkkilä says.
According to Kenkkilä, the deal is a win-win situation for both companies, as Nokia simultaneously gains closer access to large data center customers through Nvidia.
Nokia becomes a “software house”
Another important aspect for Nokia is the fate of mobile networks. When the company changed its CEO in the spring, the market speculated whether Nokia should sell its low-margin mobile networks.
“CEO Justin Hotard strongly defended their strategic importance at the time, and these negotiations were certainly underway then. He surely knew what he was talking about, why mobile networks would return to the center stage.”
The third and biggest thing for Nokia in the Nvidia collaboration is the application side.
According to Juuso Kenkkilä, Head of Equity Investments, Nokia has traditionally done low-margin hardware business. In the future, network improvements will be made through software installed on devices.
“The company will be able to sell higher-margin business. Nokia will become more of a software house. That’s really big news.”
Kenkkilä describes Tuesday’s news as the most significant news for Nokia in 20 years.
Well, one would rather read these than Inderes’s ‘reduce’ recommendations..
As an owner, OP’s reports are generally more pleasant to read, because many analysts at Inderes (unlike in 2021) often have a bit gloomy [outlook].. with Kinnunen being an exception, of course. Others would need a happiness pill… It’s probably not worth selling yet because of such a small rise (Signed: owner of Apple and Nvidia sometimes over 10 years ago)
The data center side is well noted. Quote: “Nvidia no longer sells just processors, but a complete package for data centers, i.e., architecture. Nokia would, of course, want its products to be part of that.”
It remains to be seen whether the investment made now is Nvidia’s last or just a seed.
Is mobile irrelevant? Huang explicitly stressed several times in streams that those millions of base stations and the related expertise and patents are the missing piece for them. Of course, another matter is with what margin and how much each segment is generating right now. But for this deal, mobile, in my opinion, has great significance. And also, of course, by the fact that Nokia alone can offer the full range, from fixed to satellites.
Please delete or move if this doesn’t belong in this thread. But in my opinion, this indicates the beginning of some kind of Nokia hype.
I haven’t seen Nokia being talked about on TikTok until now. 500k views, 17k likes, 500 comments. In the comments, Nokia is being declared a 5G leader, and a small stock pump is noticeable. However, many there still think Nokia makes phones or died out with phones. It’s good that they are hearing Nokia’s name now, even through TikTok.
The video was published by Yahoo Finance and contains clips from yesterday’s Nvidia event.
The profit contribution of the Mobile segment in Nokia will be relatively low over the next few years. Or at least it will be when compared to the Infra segment’s profit. And thus, Nokia’s higher valuation will not primarily be based on this Mobile side.
Of course, when considering what Nokia will look like around the turn of the 2030s, the mobile segment will no longer be insignificant. And this has truly enormous strategic value. This is also evident from Nvidia’s actions and Jensen’s words. I previously used the phrase “somewhat exaggeratedly, even irrelevant” in that context.
However, at the moment, those who hold a negative recommendation for Nokia or otherwise speak of it being overpriced seem to repeatedly argue specifically about Mobile. And currently, the Infra segment, with its IP and optical networks, is the area where large investments are starting to move among hyperscalers and data centers. Many do not seem to take this into account at all, and in a way, attention is shifted away from the essential matter of the coming years with a sleight of hand.
It’s somewhat similar, in my opinion, to discussing Nokia’s value and only considering the Mobile side, as if discussing ice hockey in the United States but only arguing about the AHL league (not the NHL, which is now Nokia’s Infra segment). This is what I was trying to say.
I understand the valuation aspect. But I was thinking purely from the perspective of this Nvidia deal. Of course, I don’t mean either-or, but rather the overall package offered solely by Nokia.
6G networks will not arrive before 2030. Before that, we should see the benefits of using Nvidia’s GPU chips in baseband and radio. Will power consumption be low enough? What will 6G bring that would create a need for it? This whole collaboration could eventually fizzle out if nothing innovative is invented and only data speeds are increased.
Nvidia’s entry will certainly increase the chances of some AI innovations becoming available to consumers over the mobile network, but if not, then why 6G?
A pitfall could be that Nokia will scale down its own SoC development and rely on Nvidia’s expertise. This path has already been trodden and seen. It’s going to go wrong.
Well, now the stock is part of the AI hype. Let’s enjoy it as long as it lasts!
I agree with this, and in my opinion, it’s noteworthy, though not much was mentioned yesterday, but Nokia’s press release did state:
“Through this collaboration, Nokia and NVIDIA will develop AI-powered network solutions and explore ways to incorporate Nokia’s data center network switching and optical technologies into NVIDIA’s AI infrastructure and architecture.“
This presents a volume opportunity and also significant leverage for credibility with other potential customers.
If we look at what Nokia announced yesterday, practically all of yesterday’s hype was related to mobile networks. Firstly, it seems that Nokia wants to run its anyRAN software more broadly than just on its own hardware in the future. This means the business model will shift more towards a software provider instead of the current hardware-based sales. Does this mean that investments in network hardware will decrease? I cannot answer that, but this question was the first to come to mind. Perhaps we will hear more about this at the Capital Markets Day.
Regarding IP and data center networks, nothing new was announced. Collaboration with NVIDIA has been done before, and Hotard is apparently satisfied with it. Hotard did not comment on what exactly is being done together. For data centers, the core question is how the collaboration practically works, because for AI data centers, NVIDIA is one of Nokia’s most significant, if not the most significant, competitor in data center networks.
NVIDIA appears to be the clear winner from yesterday’s information. It now gains direct access to the mobile network market, but no equally direct revenue driver from this collaboration appears for Nokia.
In the comments, Nokia is declared a 5G leader and a small stock pump is noticeable. However, many there still think Nokia makes phones or died with phones.
There are currently 835 4G networks deployed worldwide, with 346 upgraded to LTE-Advanced and 160 Gigabit enabled.[1] 4G population coverage outside of mainland China reached 90 percent globally at the end of 2024 and is projected to reach over 95 percent in 2030.
The build-out of 5G continues, with more than 340 networks launched worldwide. Global 5G population coverage reached 55 percent at the end of 2024. Outside mainland China, it is projected to increase from 45 percent in 2024 to about 85 percent in 2030.
So, there’s still work to be done with 5G penetration. I don’t know if NSA networks are counted in either generation here, or if 5G only includes SA networks.
I don’t know if this Bloomberg interview was already on this forum, but all owners and those considering investing in Nokia should watch this carefully
