When Nokia’s hardware division was bought by Microsoft, the company promised that it wasn’t going to disappear into the shadows. Nokia’s other businesses extend further than just hardware, and the company would continue their other divisions like Nokia Networks, IP licensing to third-parties, and advanced robotics, optics, and healthcare technology development. When the split happened, a clause agreement was signed that stated Nokia could not legally enter into the smartphone market for a period of two years after the split and merge with Microsoft. That period is now over, and Nokia has announced that it intends to return to mobile markets in 2016.
In a statement released to the press, Nokia Technologies president Ramzi Haidamus divulged some details about how the company was going to make a comeback, which is particularly difficult when you’ve lost your hardware division and can’t produce anything in-house anymore. Nokia will be partnering with Finland-based HMD Global Oy to license its brand in an exclusive ten year-long agreement. HMD will handle the design, prototyping, and fabrication of the devices, and Nokia’s assistance will come in the form of branding, marketing, and global distribution.
“Today marks the beginning of an exciting new chapter for the Nokia brand in an industry where Nokia remains a truly iconic name,” said Haidamus. “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. Working with HMD and FIH will let us participate in one of the largest consumer electronics markets in the world while staying true to our licensing business model.”
The devices will be based on Android and will probably launch with Android 6.0 Marshmallow, giving Nokia a clean slate to work with and a good start with regards to application compatibility. HMD, as it turns out, is not a completely unrelated company – its former CEO is Florian Seiche, who holds the position of senior vice president for Europe sales and marketing at Microsoft Mobile. Seiche will step down as president once the no-compete clause period is over, and will hand control of the company to Arto Numella, a former Nokia employee and current head of Microsoft’s Mobile Devices division for the EMEA region as well as the Feature Phones division globally.
“We will be completely focused on creating a unified range of Nokia-branded mobile phones and tablets, which we know will resonate with consumers,” said Numello in his address. “Branding has become a critical differentiator in mobile phones, which is why our business model is centered on the unique asset of the Nokia brand and our extensive experience in sales and marketing. We will work with world class providers in manufacturing and distribution to move quickly and deliver what customers want.”
The third party involved in this maneuver is Foxconn subsidiary FIH Mobile Ltd. FIH will acquire Microsoft’s Feature Phones division wholly, and will licence the Nokia brand as well in order to create a cohesive experience. These feature phones will be similar to the old X-series of Nokia phones, which were based on Android but had a custom skin and launcher. These phones had no access to the Google Play store, so they relied on Nokia’s services to function.