Nokia gets back in the phone business

nokia-in-advanced-talks-to-acquire-alcatel-lucents-wireless-business-reportsFormer rubber boot maker Nokia is back in the mobile phone and tablet business after flogging its previous loss making empire to Microsoft which trashed it.

Nokia has announced plans that will see the Nokia brand 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 (HMD), a newly founded company based in Finland, an exclusive global licence to create Nokia-branded mobile phones and tablets for the next ten years.

Under the agreement, Nokia Technologies will receive royalty payments from HMD for sales of Nokia-branded mobile products, covering both brand and intellectual property rights.

HMD will provide a focused, independent home for a full range of Nokia-branded feature phones, smartphones and tablets. HMD has conditionally agreed to acquire from Microsoft the rights to use the Nokia brand on feature phones, and certain related design rights.

These agreements would make HMD the sole global licensee for all types of Nokia-branded mobile phones and tablets.

Apparently HMD intends to invest over $500 million 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.

HMD’s new smartphone and tablet portfolio will be based on Android, uniting one of the world’s iconic mobile brands with the leading mobile operating system and app development community.

FIH Mobile Limited (FIH), a Foxconn subsidiary has bought the remainder of Microsoft’s feature phone business assets, including manufacturing, sales and distribution. 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.

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 will provide HMD with branding rights and cellular standard essential patent licenses in return for royalty payments, but will not be making a financial investment or holding equity in HMD.

HMD’s new CEO will be 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 and Microsoft’s global Feature Phones business. HMD’s president will be Florian Seiche, who is currently Senior Vice President for Europe Sales and Marketing at Microsoft Mobile, and previously held key roles at Nokia, HTC and other global brands.