Nokia closes handset brand licensing deal

About $500 million will be spent on marketing the brand across the world over the next three years. HMD will be eligible to pay Nokia a royalty for every phone sold for the branding and the name usage. Notably, he was also the co-founder of HTC’s smartphone business.

Of course today its barely a footnote, but HMD Global will be looking to change that in 2017. It has a licensing deal with Nokia giving it sole use of the brand on mobile phones and tablets for the next decade. HMD naturally hopes that it will be able to replace feature phones with cheap smartphones and thus will capture a sizeable chunk of the market.

Until now, the Nokia smartphones manufactured by Microsoft have been quite cheap, especially in Eastern Europe, India, and Asia.

Then, the phone business was sold to Microsoft, which soon found it had made a disastrous purchase as the Nokia Windows combination failed to claim a significant slice of a market dominated by Apple’s iOS and Android.

HMD is building its smartphone operating system in partnership with Google and all its Nokia devices will be manufactured by Foxconn (2354.TW) of Taiwan, the world’s largest contract manufacturer.

The company has enlisted the help of FIH Mobile Limited, a subsidiary of Foxconn, to handle manufacturing duties. The latter approach has been taken by Motorola, whose phones run a lightweight version of Google’s mobile OS with a handful of custom tweaks on top, and has proven as a viable approach preferred by many.

The HMD Global Team comprises of ex-Nokia employees and is headed by Arto Nummela who is the Chief Executive Officer.

“We will be extremely true to the Nokia brand. It has the potential to capitalize on it”, ET quotes brand consultant Harish Bijoor as saying.

A woman poses with a Nokia Lumia smartphone in this photo illustration, May 6, 2013.

The company combines the agility and attitude of a start-up business with the expertise of some of the industry’s most experienced and passionate senior leaders.

The entry of Nokia into the already fiercely competitive Android market is viewed with doubt by some pundits, but is said to have gained an enthusiastic welcome by consumers, according to Nokia.