Nokia could force Vivo out of Germany to Samsung’s benefit

As if the headwinds in the European market aren’t already preventing the Chinese OEMs from competing against the likes of Samsung, a new challenge has emerged for Vivo, a leading Chinese manufacturer that has a solid position both in its home country and in markets across Asia and the Middle East.

Vivo has been unable to resolve a patent issue with Nokia and that has led to a suspension in sales of its products in the German market. The impact of this challenge is limited to Germany and not the whole of Europe, but it could force Vivo to abandon its operations in Germany altogether.

Samsung will happily go after Vivo’s share if it leaves Germany

One of Nokia’s 4G standard essential patents is central to the entire issue. Companies that have licensing agreements with Nokia are in the clear. Nokia has pursued legal action against those that haven’t settled licensing deals with the company.

Similar action was initiated against Oppo last year. Oppo decided to leave the German market and there are no signs that it intends to come back any time soon. A Mannheim court has now awarded Nokia an injunction against Vivo which when enforced will require Vivo to suspend sales of its products in Germany.

If Vivo wants to continue selling products in Germany, it would need to enter into a cross-licensing agreement with Nokia. Vivo says that it has negotiated with Nokia about renewing the licenses but an agreement hasn’t been reached so far. The company adds that it will continue its discussions with Nokia in hopes of finding a resolution while it’s also preparing to lodge an appeal against the court’s decision.

It remains to be seen if Vivo takes the same route as Oppo and decides to just give up on the German market. Whatever happens, Samsung remains the unintended beneficiary, as this will result in one less competitor to worry about in Germany.