Wednesday, May 18, 2016

Nokia Plans Return to Mobile Phones

Nearly three years after selling its device business to Microsoft, Nokia is preparing to return to the mobile phone business on a global basis.

Nokia is working with a newly founded company based in Finland that is called HMD global Oy (HMD). This new company will have an exclusive global license to create Nokia-branded mobile phones and tablets for the next ten years and Nokia Technologies will receive royalty payments. HMD will be headed by Arto Nummela, who 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.

In addition, HMD has conditionally agreed to acquire from Microsoft the rights to use the Nokia brand on feature phones, and certain related design rights. The Microsoft transaction is expected to close in H2 2016. Together these agreements would make HMD the sole global licensee for all types of Nokia-branded mobile phones and tablets. HMD intends to invest over USD 500 million over the next three years to support the global marketing of Nokia-branded mobile phones and tablets.

The remainder of Microsoft's feature phone business assets, including manufacturing, sales and distribution, will be acquired by FIH Mobile Limited (FIH), a subsidiary of Hon Hai Precision Industries (trading as Foxconn Technology Group).  HMD and Nokia Technologies have 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.

"Today marks the beginning of an exciting new chapter for the Nokia brand in an industry where Nokia remains a truly iconic name. Instead of Nokia returning to manufacturing mobile phones itself, HMD plans to produce mobile phones and tablets that can leverage and grow the value of the Nokia brand in global markets. Working with HMD and FIH will let us participate in one of the largest consumer electronics markets in the world while staying true to our licensing business model," stated Ramzi Haidamus, president of Nokia Technologies.

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