Nokia To Re-Enter Device Market And Reinvent The Brand With Android
was once a major force in the mobile phone market, before the rise of smartphones
and subsequent selloff to Microsoft
, which never made good use of the transaction. Now Nokia is making a comeback, or at least will attempt to make one, through a 10-year licensing deal with HMD Global Oy.
HMD is a new outfit in Finland that was created to "provide a focused, independent home for a full range of Nokia-branded feature phones, smartphones, and tablets." The decade long deal covers exclusive branding rights and intellectual property licensing, and in return HMD will make royalty payments to Nokia for sales of all Nokia branded mobile products, all of which will run Android.
"Instead of Nokia returning to manufacturing mobile phones itself, HMD plans to produce mobile phones and tablets that can leverage and grow the value of the Nokia brand in global markets," said Ramzi Haidamus, president of Nokia.
To make the deal possible, HMD bought from Microsoft the rights to use the Nokia brand on phones. That transaction will close in the second half of this year, at which time HDM will be the sole global licensee for all types of Nokia branded mobile phones and tablets. In addition to that, HDM plans to invest over $500 million over the next three years marketing its new venture.
This is basically a rebirth of the Nokia brand in the mobile device market. The name largely disappeared when Nokia sold its entire handset business to Microsoft for around $7.2 billion in 2013. Microsoft never did much with the name and decided a year later to stop using it
and instead focus on the Lumia brand.
Nokia and HDM also signed an agreement with FIH Mobile Limited, a subsidiary of Hon Hai Precision (Foxconn), which bought from Microsoft its remaining feature phone assets, including manufacturing, sales, and distribution.