Nokia phones is back guys! Nokia has announced that it will license its brand and intellectual property of old-fashioned feature phones for $350 million to FIH Mobile, a subsidiary of Chinese smartphone manufacturer Foxconn and a newly formed company called HMD Global bringing to an end Microsoft’s epic mishandling of Nokia’s mobile business.
Once the world’s biggest maker of mobile phones, the Finnish firm was wrong-footed by the rise of smartphones and eclipsed by Apple and Samsung. It sold its handset business to Microsoft in late 2013 and has since focused squarely on making telecoms network equipment.
Preparation for a comeback has been on since last year when Nokia boss Rajeev Suri said he must wait until late 2016 before he can consider re-entering the handset business – after a non-compete deal with Microsoft expires – and now, this deal with Foxcon.
Foxconn, which is best known as the manufacturer of Apple and iPhones, will also be able to produce and sell a portfolio of Android smartphones and tablets using the Nokia brand in addition to feature phones.
HMD global is based in Finland and will be led by Arto Nummela, a Nokia veteran who moved to Microsoft when the latter company took over the former’s mobile business. The transaction is expected to be finalized in the second half of this year – end of June.
When it is completed, Nummela will be installed as CEO and HMD will be able to sell Nokia-branded feature phones as well as Android-based smartphones and tablets. The new firm plans to invest more than $500 million over the next three years to market its mobile products worldwide.
Foxconn’s participation in this is also interesting. Its subsidiary FIH Mobile is the company that today picked up the remnants of Nokia’s former feature phone business from Microsoft for $350 million. HMD global and FIH already have a collaborative agreement in place “to support the building of a global business for Nokia-branded mobile phones and tablets.” The Nokia N1 tablet was built by Foxconn in partnership with Nokia and the new HMD venture, while claiming independence, appears to be a formalization of that budding relationship.
The sale will not affect Microsoft’s Windows-based mobile operations. The company says it will continue to develop Windows 10 Mobile and keep its Lumia brand of phones alive, while continuing to partner with hardware makers like Acer, Alcatel, HP and VAIO. At least, Microsoft will be freed up to focus on flagship devices based on Windows 10.
Nokia had been a leader of feature phone markets for a long time until it received a tough competition from the rising popularity of smartphone makers. It will be interesting to see how Nokia performs as it teams up with Foxcon, to start designing smartphones, in the overly crowded smartphone market that will only multiply in the coming years.