Nokia plans return to mobile market with cellphones, tablets

The company has reached a licensing agreement with HMD for it to use the Nokia brand on Android-powered smartphones, tablets and feature phones.

The pared-down Finnish telecoms company, which now focuses on networks, says it is bringing out “a new generation” of cellphones and tablets together with a new company called HMD. The company has announced that it will license its name and intellectual property to a new company called HMD global Oy, which will have the rights to build and sell products using the Nokia name for the next 10 years.

We nevertheless like the initiative, as it costs nothing to Nokia in terms of investments and will contribute somewhat to Nokia Technologies revenue.

But analysts are skeptical as to how much upside the licensing deal will generate for Nokia given that its phones account for roughly 6% of the global market. It says that Nokia still features among the top five considered smartphone brands in current surveys, even though no such devices are available right now. The best solution is to combine Nokia’s design knowledge and expertise together with Foxconn’s manufacturing togetherness and make one of the best hardware companies. HMD plans to release Nokia branded smartphones, as well as tablets.

After months of rumours, Nokia confirmed today it is returning to the smartphone business. All this has to go along and incorporate the Nokia wearable devices venture after they recently purchased Withings. But the company is well-stacked with former Nokia executives. Nokia has used this brand licensing approach before. “However, Nokia won’t bear any of the risks”, Sarkamies said, estimating the extra revenues would be counted in tens, not hundreds, of millions of euros.

A subsidiary of Foxconn, the company that manufactures the iPhone, is also part of the deal. Microsoft now holds the Nokia name as part of the sale, preventing it from creating new smartphones.

In 2011, it chose to bet on the Windows mobile platform, which proved to be a failure. Under an with agreement with FIH Mobile, HMD will receive full operational control of sales, marketing and distribution of Nokia-branded mobile phones and tablets. Arto Nummela, a Nokia veteran who moved to Microsoft after it acquired Nokia, will be leading the company as CEO once the transaction is complete.