Brand Boomerang: Nokia Plans a Return to Smartphones
Two years after the name Nokia basically disappeared from the smartphone business, it will make a return.
In 2014, the Finnish company sold its smartphone business to Microsoft for $7.2 billion and the brand name disappeared from the market, replaced by products from Samsung and Apple. Now, Nokia has announced it is licensing the brand to another Finnish company that is headed up by previous Nokia employees. The new company has more than $500 million in investments from HMD Global. According to Gizmodo, the deal is good for the next decade—an eon in the smartphone world.
“It’s going to take more than a well-known brand name in this competitive market,” Gartner analyst Annette Zimmermann told Bloomberg. “To shake up the market and offer something that excites the fickle market will be difficult.”
The new effort using Nokia’s name will be run by former Nokia manager Arto Nummela, who is also currently the head of Microsoft’s Mobile Devices business for Asia, Middle East and Africa.
“The long and short of it—new Nokia–branded phones and tablets are on the way,” notes Gizmodo. However, HMD isn’t quite ready to start churning out tablets and phones just yet. Products still need to be developed before they will be marketed and sold.
Microsoft may be getting out of selling cheaper phones as it also announced it is selling its feature phone assets to Foxconn subsidiary FIH and HMD, and phasing out its Lumia brand.
As ZDNet notes, “Microsoft’s announcement today that it is selling off the remaining feature phone part of its mobile business and only “supporting” (not continuing to manufacture new models) of its Lumia Windows Phone line is yet another instance of Microsoft signaling ‘our strategy has shifted.‘”
“Feature phones were never a core part of Microsoft’s strategic aim behind the purchase of Nokia’s devices business,” said IHT Technology analyst Ian Fogg to the BBC. “Following the Microsoft reorganization last year, it was clear the feature phone business was an unwanted extra and Microsoft most likely took the first good offer to take the business off its hands.”
The deal is expected to close by year’s end and will see about 4,500 people change employers.