Nokia Is Back, Promises New Generation of Mobiles (based on Android)
Article by George Norman
On 18 May 2016
Microsoft is selling its feature phone business. Meh, who cares? The Nokia brand is returning to the market with new, Android-powered phones and tablets. Mind blown!

These two new stories may not seem like they have anything in common, but they do. Because Microsoft decided to let go of its feature phone business, Nokia was able to sign a deal, enabling it to bring the Nokia brand back from the dead. Read the whole story below.

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Microsoft sells feature phone business for $350 million



Microsoft announced today that it reached an agreement to sell its feature phone business to FIH Mobile Ltd (a subsidiary of Hon Hai Precision Industries, trading as Foxconn Technology Group) and HMD Global Oy (a newly founded company based in Finland).

They have agreed to pay $350 million for all of Microsoft’s entry-level feature phone assets, which includes brands, software and services, care network and other assets, customer contracts, critical supply agreements, and Microsoft Mobile Vietnam, the manufacturing facility located in Hanoi, Vietnam.

FIH will pay $330 million for the manufacturing facility and the sales and distribution network, while HMD will pay $20 million for Microsoft's feature phone brand and design rights.

The deal hasn’t been completed yet, as it’s subject to regulatory approvals and other closing conditions. Microsoft expects it to close in the second half of 2016.


Microsoft will continue to develop Windows 10 Mobile and support Lumia



Microsoft selling its feature phone business does not mean the company is giving up on Windows 10 Mobile. Microsoft will continue to develop the mobile operating system.

Furthermore, Microsoft will continue to support Lumia phones such as the Lumia 650, a premium design smartphone that runs Windows 10, has a diamond cut metal frame, a generous 5-inch display, and 16GB of internal storage.

And last but not least, Microsoft will continue to support phones from OEM partners like Acer, Alcatel, HP, Trinity and VAIO.


To bring back the Nokia brand, Nokia signs agreement with the companies that bought Microsoft’s assets


Nokia today announced that, with the aim of bringing the Nokia brand back to the market, it signed a strategic brand and intellectual property licensing agreement with HMD Global Oy. Nokia gave HMD the exclusive rights to create Nokia-branded mobile phones and tablets for the next 10 years.

HMD, as one of the companies that bought Microsoft’s entry-level feature phone assets, also has the rights to create Nokia-branded feature phones. This means that HMD, a newly founded company based in Finland, has the rights to Nokia-branded feature phones as well as Nokia-branded smartphones and tablets.

HMD aims to create a new generation of Nokia-branded mobile devices and it intends to invest more than $500 million USD over the next three years to support the global marketing of these devices. Nokia will set mandatory brand requirements and performance related provisions to ensure that all of HMD’s Nokia-branded products exemplify consumer expectations of Nokia devices, including quality, design and consumer focused innovation.


HMD will market Nokia-branded smartphones and tablets that run Android



HMD plans to come up with a portfolio of new, Nokia-branded smartphones and tablets that run Google’s Android mobile operating system. And FIH Mobile Limited, the other company that bought Microsoft’s entry-level feature phone assets, will help. Nokia and HMD have signed an agreement with FIH, establishing a collaboration framework to support the building of a global business for Nokia-branded mobile phones and tablets.

"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 Arto Nummela, CEO-designate of HMD. " 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."

"We are looking forward to fostering a strong and long-term collaboration with HMD global and Nokia,” said Vincent Tong, Chairman of FIH. "We are impressed by the experience and expertise of the HMD management team and are committed to supporting them with our manufacturing, technology and supply chain capabilities, to capture market opportunities together in the future."

"Today marks the beginning of an exciting new chapter for the Nokia brand in an industry where Nokia remains a truly iconic name,” said Ramzi Haidamus, President of Nokia Technologies. "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 story behind the story



Back in September 2013, Microsoft entered an agreement to purchase Nokia's mobile phone business for about $7 billion. When the deal closed in April 2014, Nokia Devices and Services joined the Microsoft family, becoming the Microsoft Mobile division.

Microsoft said at the time that the acquisition would help it accelerate innovation and market adoption for Windows Phones. That hasn’t happened. Microsoft’s smartphones are still overshadowed by Apple’s iPhone and the myriad of Android devices that are out there. Microsoft has been unable to establish itself as a serious contender on this market.

Following the acquisition, there were rumors that Nokia might want to reenter the mobile phones market. Robert Morlino, spokesman for Nokia Technologies, responded to those rumors in the summer of 2015. He said at the time that Nokia might reenter the mobile phones market if the right hardware partner is found, but only though a through a brand-licensing model. Nokia itself would not reenter the market.

That is precisely what has happened today. Nokia signed a licensing deal with HMD and a collaboration agreement with FIH, which will see the Nokia brand return to the mobile phone and tablet markets on a global basis.

Recap
  • Microsoft entered an agreement to sell its feature phone business for $350 million.
  • Microsoft will continue to develop Windows 10 Mobile, support Lumia phones, and support phones from OEM partners.
  • Nokia entered an agreement with the companies that bought Microsoft’s feature phone business, FIH Mobile Ltd and HMD Global Oy.
  • HMD and FIH will help bring back the Nokia brand by creating and marketing a new generation of Nokia-branded feature phones, smartphones and tablets.
  • The new Nokia-branded smartphones and tablets will be based on Android.

I just have to say that this is exciting news. I can’t wait to see what sort of Nokia-branded and Android-powered phones and tablets will hit the market in the future.




Tags: Microsoft, Nokia, feature phone, Lumia, Windows 10 Mobile, Google, Android, smartphone, tablet, acquisition, agreement
About the author: George Norman
George is a news editor.
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