Fans of the Nokia brand, rejoice! The once powerful cellphone maker is preparing a comeback — of sorts.
The Finnish company, which in 2014 sold its handset business to Microsoft — which in turn failed to make much with the acquisition — has announced that it will license its brand and intellectual property to a newly created firm by the name of HMD Global.
In a statement on Wednesday, Nokia said its brand will return to the mobile phone and tablet markets on a global basis.
“Under a strategic agreement covering branding rights and intellectual property licensing, Nokia Technologies will grant HMD Global Oy, a newly founded company based in Finland, an exclusive global licence to create Nokia-branded mobile phones and tablets for the next 10 years.”
Under the agreement, Nokia will receive royalty payments from HMD for sales of Nokia-branded mobile products, covering both brand and intellectual property rights.
“HMD has been founded to provide a focused, independent home for a full range of Nokia-branded feature phones, smartphones and tablets,” Nokia said.
“To complete its portfolio of Nokia branding rights, HMD announced today that it has conditionally agreed to acquire from Microsoft the rights to use the Nokia brand on feature phones, and certain related design rights.”
It said the Microsoft transaction is expected to close in the second half of 2016.
“Together, these agreements will make HMD the sole global licensee for all types of Nokia-branded mobile phones and tablets.”
HMD said it intends to invest more than US$500m over the next three years to support the global marketing of Nokia-branded mobile phones and tablets, funded via its investors and profits from the acquired feature phone business.
“Nokia-branded feature phones remain one of the most popular choices of mobile phone in many markets around the world today, and HMD will continue to market them as part of an integrated portfolio alongside a new range of smartphones and tablets,” Nokia said.
HMD’s new smartphone and tablet portfolio will be based on Android.
At the same time, Foxconn subsidiary FIH Mobile has announced it will acquire the remainder of Microsoft’s feature phone business assets, including manufacturing, sales and distribution.
HMD and Nokia have, in turn, signed an agreement with FIH to “establish a collaboration framework to support the building of a global business for Nokia-branded mobile phones and tablets”.
“This agreement will give HMD full operational control of sales, marketing and distribution of Nokia-branded mobile phones and tablets, with exclusive access to the pre-eminent global sales and distribution network to be acquired from Microsoft by FIH, access to FIH’s world-leading device manufacturing, supply chain and engineering capabilities, and to its growing suite of proprietary mobile technologies and components,” Nokia said.
“Nokia will provide HMD with branding rights and cellular standard essential patent licences in return for royalty payments, but will not be making a financial investment or holding equity in HMD.”
Nokia will take a seat on HMD’s board and set mandatory brand requirements and performance-related provisions to ensure that all Nokia-branded products “exemplify consumer expectations of Nokia devices”.
HMD will be led, once the Microsoft transaction closes, by Arto Nummela as CEO. Nummela previously held senior positions at Nokia and is currently the head of Microsoft’s mobile devices business for greater Asia, Middle East and Africa, as well as Microsoft’s global feature phones business. — (c) 2016 NewsCentral Media