Nokia to make a comeback with Android smartphones
The iconic Nokia brand will make a return to the world of smartphones, this time with Android handsets. The Finnish company was acquired by Microsoft in 2014, their work focused on manufacturing Windows Operating System and the Nokia Lumia platform which was converted to Microsoft Lumia. The brand will be sold by Microsoft as a part of a $350 million deal to FIH mobile, a subsidiary of the Taiwanese electronics giant Foxconn and a relatively new Finnish company called HMD Global which is also based in Nokia’s hometown Helsinki.
Nokia revealed that HMD Global is acquiring “an exclusive global license to create a full range of Nokia-branded smartphones, tablets, and feature phones for the next decade,” and well as the relevant rights to use the Nokia name on smartphones and tablets for the next ten years. The new devices will be based on the Android Operating System and manufactured in a plant in Hanoi, Vietnam.
Arto Nummela, former Nokia executive and current Microsoft mobile executive will be leaving Microsoft to be the CEO of HMD Global when the deal closes. Along his side will be Florian Seiche, another Microsoft executive who has a history with Nokia will join HMD Global as president. A reported number of 4,500 employees will also be moving from Microsoft to FIH Mobile/Foxconn.
“We will be completely focused on creating a unified range of Nokia-branded mobile phones and tablets, which we know will resonate with consumers,” Nummela said in a statement. “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.”
HMD Global will be investing a sum on $500 million for the next three years for the purpose of product development and promotions. Nokia’s involvement in the upcoming products will be quite restricted and the funds will be sourced from investors and profits from the feature phone business. Nokia will take place on HMD Global’s board and set “mandatory brand requirements and performance related provisions” to make sure that there is no compromise on quality.
FIH Mobile and Foxconn, even though being partners with HMD Global in this deal, won’t have any rights over the brand name of Nokia. All the rights will be in HMD Global’s custody for the next 10 years and FIH mobile/Foxconn will be manufacturing the smartphones and tablets for HMD Global in their Hanoi plant. The promotions and selling part will be undertaken by HMD Global and the overall quality and standards will be regulated by Nokia who will provide HMD Global and FIH mobile/Foxconn access to their various patents.
On the other end of the pond, Microsoft will continue to produce Windows powered smartphones, tablets and the Lumia devices. The upcoming handsets will feature the latest Windows 10 Operating System and Microsoft will be working alongside its manufacturing partners Acer, Alcatel, HP and Vaio on Windows software powered mobile devices.