Nokia Branded Phones, Tablets Returning to Market in Licensing Deal
Nokia mobile phones, smartphones and tablets will be headed back to markets around the globe now that the company has reached a 10-year licensing deal to have its mobile phone designs developed, built, distributed and marketed by a newly formed Finnish company, HMD Global.
In a related deal, Microsoft's remaining feature phone manufacturing, sales and distribution assets are being acquired by Foxconn Technology Group's FIH Mobile Ltd. (FIH), which has signed a deal with HMD and Nokia Technologies to use the Nokia brand on feature phones while building a global business for Nokia-branded mobile phones and tablets, according to the companies. FIH is acquiring the feature phone assets from Microsoft for $350 million under the deal. None of Microsoft's existing Windows 10 Mobile smartphone technologies and products are included in the transaction.
The separate deals were announced on May 18 by the parties, which include HMD, founded to spearhead the new branding, design, marketing and sales initiatives for Nokia mobile phones, smartphones and tablets. All of the new Nokia-branded devices will run on the Android operating system, rather than on Nokia's own operating system, which was used on its earlier phones.
HMD said the Microsoft transaction will close in the second half of 2016 and that the company plans to invest more than $500 million over the next three years to market the new products around the world. No timeline was announced for when the new devices will become available.
HMD Global will build and sell the phones for 10 years. In a related deal, HMD is getting entry-level phone branding rights from Microsoft.
"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, CEO-designate of HMD, said in a statement. "Branding has become a critical differentiator in mobile phones, which is why our business model is centered on the unique asset of the Nokia brand and our extensive experience in sales and marketing. We will work with world-class providers in manufacturing and distribution to move quickly and deliver what customers want."