QTECH – The Nokia brand is set to return to mobile phones, two years after the Finnish company sold its flagship handset business and walked away defeated by Apple and Samsung.
Once the world’s biggest maker of mobile phones, Nokia was wrong footed by the rise of smartphones. It sold its entire handset business to Microsoft in 2014. But it held on to its phone patents with a view to eventually striking a licensing deal, though it had to wait due to a non-compete deal with Microsoft.
Nokia said on Wednesday it had signed an exclusive 10-year licensing agreement for newly formed Finnish company HMD global Oy to create Nokia-branded smartphones and tablets. HMD is owned by Smart Connect LP, a private equity fund run by former Nokia executive Jean-Francois Baril, and its management.
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. Microsoft announced simultaneously it would sell its entry-level phones business to HMD and Foxconn subsidiary FIH Mobile for $350 million.
Nokia, whose global market share in handsets peaked at around 40 percent in 2008, said its brand remained widely recognized, especially in developing markets.
“The areas where we believe the brand is strongest are Asia, South America and parts of Europe. Clearly China will be one of the target markets,” Ramzi Haidamus, chief executive of the Nokia Technologies unit, told Reuters.
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In the late ’90s when I was in the telecom business in Silicon Valley, Nokia was eating everyone’s lunch including it’s two biggest competitors at the time, Motorola and Ericsson. Now, all are either gone or uncompetitive in a market dominated by Samsung, which was considered only a third-string player at the time. Well, times change. You wonder if former software comapanies like Google and Microsoft will soon become the market leaders in telecom hardware and what their products will offer.