Millions invested to revive brand equity.
Two years after Nokia sold its handset business, the brand is ready to return to the mobile phone market but this time Nokia won’t have a financial stake in the venture.
The Finnish company said on Wednesday that it will license its brand to a Helsinki-based company HMD Global, run by former Nokia managers. Their aim is to bring new mobile phones and tablets to the market. To date the group has investment plans topping $US500 million.
Nokia will collect fees from brand licensing and intellectual property.
Meanwhile, Gartner Germany smartphone analyst, Annette Zimmermann believes that the going will be tough.
“It’s going to take more than a well-known brand name in this competitive market,” she said. “To shake up the market and offer something that excites the fickle market will be difficult.”
Nokia is notorious for its failure from 2007 onward to adequately respond to the global popularity of Apple’s iPhone. I has since been forced to reinvent itself as a telecommunications equipment maker, producing mobile network and broadband infrastructure for the likes of AT&T and Verizon Wireless.
HMD is funded by a group of international private-equity backers through a fund called Smart Connect, as well as by HMD’s management team. The venture will be run by a former Nokia manager, and current head of Microsoft’s Mobile Devices business for Asia, Middle East and Africa and its feature-phone business Arto Nummela. Former Nokia executive and current Microsoft manager Florian Seich, will be president at HMD.
The venture will make smartphones running Android, and also plans tablets and cheaper, so-called feature phones. FIH Mobile, part of Foxconn Technology Group, will help to build the devices.
The new venture also marks an exit from cheaper phones by Microsoft. As part of the deals announced Wednesday, Microsoft is selling its feature-phone assets to FIH and HMD.
When Nokia exited phones in 2014, Microsoft acquired rights to use the Nokia brand in smartphones for two years, though it has already stopped using it.
As part of Wednesday’s sale, FIH Mobile also will acquire Microsoft Mobile Vietnam, which runs the company’s Hanoi, Vietnam, manufacturing facility. The operation’s roughly 4,500 employees will transfer to, or have the opportunity to join, FIH Mobile or HMD Global, according to Microsoft.