“We will be completely focused on creating a unified range of Nokia-branded mobile phones and tablets, which we know will resonate with consumers”, Arto Nummela, chief executive of HMD global said.
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The deal is said to be worth around $350 million and will see Microsoft’s “entry-level feature phone assets” transfer over to the Foxconn subsidiary known as FIH Mobile.
Nokia was the world’s leading mobile phone maker from 1998 until 2011 when it bet on Microsoft’s Windows mobile platform which proved to be a flop.
A new company called HMD has been allowed to produce mobile phones and tablets in the name of Nokia.
Nokia remained the owner of the Nokia brand when it sold its hand set business to Microsoft, but was restricted in the deal from licensing it to outsiders until the end of 2015.
Another interesting fact about HMD Global is that the company was founded by former Nokia employees, who ensured that Nokia had a seat at the HMD Board warrant that the quality and reputation of the Nokia brand are maintained.
USA technology major Microsoft, the owner of Nokia’s mobile device business, has agreed to sell the latter’s branding rights to Finnish firm HMD Global and contract manufacturer Foxconn for Dollars 350 million.
For the Indian consumer, it means two things – the re-entry of Nokia brand, with its enormous recall and loyalty base, will see yet another entrant in the highly competitive mobile and smartphone market.
“The Nokia brand is very strong in certain markets too and HMD will likely target these emerging markets instead of the already saturated developed markets”, it estimated.
On Wednesday, IHS analysts, Ian Fogg and Daniel Gleeson, said in a research report that the decision of Microsoft of walking away from the feature phone business isn’t surprising. The new gadgets will use the Android system. Lumia and other Windows phones will still be supported by Acer, HP, and VAIO.
So, what now? HMD promises to invest $500 million over the next three years, to support the marketing of Nokia-branded phones and tablets worldwide.
FIH Mobile will get all of Microsoft (MSFT, Tech30) feature phone assets, including brands, software, and customer contracts, as well as its factory in Vietnam.
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The products will be made by Taiwan’s Foxconn and Nokia will receive an undisclosed royalty on sales, covering both brand and intellectual property rights.
