Nokia Branded Phones, Tablets Returning to Market in Licensing Deal

By Todd R. Weiss  |  Posted 2016-05-18 Print this article Print
Nokia, Windows Phone, Microsoft, licensing, smartphones, feature phones, HMD Global, Foxconn, Lumia, mobile phones

The Nokia announcements won't likely move buyers much at this point today, said Olds. "I think consumers are overwhelmed with the choices in the phone/tablet/mobile market and won't really notice either the exit of a player or [the arrival of] a new player. I think this is too little, too late for the Nokia name and their partners. The world has changed since the time they were phone powers, and there really isn't a ready-made place for them in the market."

Another analyst, Charles King, principal of Pund-IT, said he can imagine that some consumers in Europe could care about the latest Nokia developments, since the Nokia brand still carries weight in some quarters there. But whether the devices would be successful there depends on design, features and pricing, he added. "Suffice it to say that HMD Global has its work cut out for it."

Overall, "it's difficult to imagine any scenarios where this deal will be successful," said King. "Given the ongoing challenges of Microsoft's efforts around smartphones, in general, and Nokia, in particular, these deals smack of a 'Hail Mary' pass thrown with an extra ladle of genuflection. At the same time, such efforts have produced winners; so while positive results seem unlikely, the effort itself may be worthwhile."  

The Microsoft and Nokia brands have been tied together for years, first because Nokia was a Microsoft premier Windows Phone partner for a long time, and later after Nokia sold its smartphone division to Microsoft in April 2014 for $7.1 billion. With that sale, Nokia left a business in which it had been a major player for more than a decade. It looked like Nokia was done with smartphones.

That changed in July 2015, when Nokia confirmed its plans to find a licensing partner that would build, distribute and sell Nokia-branded phones once again, using the company's vast design and engineering resources, according to an earlier eWEEK story. Once Nokia sold its manufacturing, marketing and channel distribution capabilities to Microsoft, it no longer had the infrastructure to again start building and selling phones on its own. Nokia had done something similar in November 2014, when the company announced that its first Android tablet computer, the N1, would be built under license by third-party device manufacturer Foxconn.

The sale of the Nokia phone business to Microsoft included a clause that prevents Nokia from re-entering the smartphone market until the fourth quarter of 2016, which is why the latest phone licensing plans are arriving now. Since the Nokia acquisition, Microsoft's Lumia line of Windows-based phones, despite being generally well-received, has barely made a dent in unseating Android- and iOS-based smartphones from the top of the smartphone market.

In April, Nokia announced the acquisition of digital health tracking company Withings S.A. for $192.6 million as it moves to position itself right into the mix of the connected health marketplace. The move is aimed at also giving Nokia more clout in the Internet of things marketplace as it works to tie its products into a tighter relationship with consumers. The acquisition was also made because health care is expected to be one of the largest vertical markets in the IoT, with analysts forecasting that mobile health will be the fastest-growing health care segment from 2015 to 2020, according to Nokia.


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