When it is complete, HMD will be able to sell Nokia-branded feature phones as well as Android-based smartphones and tablets.
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A new chapter for Nokia, the once powerful mobile company after its parent company, Microsoft made a decision to sell it to a new company. The agreement with Microsoft has some conditions and only covers the use of the Nokia name in basic phones.
Microsoft is also transferring its feature phone assets, including brands, software and services, care network and other assets, customer contracts and supply agreements, although it didn’t say which company – FIH Mobile or HMD Global – gets which assets.
Today’s events also mark Nokia’s return to the mobile phone business, as the Finnish company announced a strategic partnership with HMD Global which enables the latter to create “a new generation of Nokia-branded mobile phones and tablets”.
Microsoft reportedly paid $7.2 billion for the Nokia handset business in 2014.
Microsoft will continue to develop Windows 10 Mobile and support Lumia phones such as the Lumia 650, Lumia 950 and Lumia 950 XL, and phones from OEM partners like Acer, Alcatel, HP, Trinity and VAIO.
The new company plans to invest over $500 million in the next five years to support its foray into the market. With the brand name still quite intact, it is likely that Nokia phones will make a resounding comeback. CCS Insight predicted worldwide sales of feature phones will reach 550 million units in 2016, and will likely slip to 240 million units by 2020. The deal is set to come to a close by the end of June. No timeline was announced for when the new devices will become available.
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CCS also noted that feature phones are still popular in emerging markets like India and sub-Saharan Africa “principally because they are an affordable option in regions where even the cheapest Android smartphones are out of reach for many consumers”.
