Nokia Won't Make Smartphones Again, Denies Rumors to the Contrary

In a terse statement, Nokia, which sold its Lumia smartphone line to Microsoft in 2014, denied recent reports that it would again build and sell smartphones in 2016.

Nokia, smartphones, Lumia, Microsoft

Nokia has denied recent reports that the company would again be building and selling smartphones by 2016, more than a year after it sold its Lumia phone business to Microsoft. The reports, which surfaced online earlier in April, cited a former Nokia executive who said that the company was working on such products and could introduce them in the future.

"Nokia notes recent news reports claiming the company communicated an intention to manufacture consumer handsets out of a R&D facility in China," the company said in an April 26 statement on its Website. "These reports are false, and include comments incorrectly attributed to a Nokia Networks executive. Nokia reiterates it currently has no plans to manufacture or sell consumer handsets."

Nokia could, however, be looking into returning to the smartphone business in the future by licensing devices from other makers and rebranding them with its name and logo, according to an April 26 report by Reuters.

Microsoft announced on Sept. 3, 2013, that it was acquiring Nokia's mobile handset business for $7.1 billion. Nokia's telecommunications equipment and navigational software unit continue to operate under the Nokia brand. The deal was completed in April 2014.

The acquisition, originally expected to close during the first quarter of 2014, encountered some resistance in China over concerns about potential changes to the patent licensing fees charged to the country's device makers, namely Lenovo, Xiaomi and ZTE, according to an earlier eWEEK report. Chinese authorities finally approved the deal in April 2014.

Before the acquisition, Nokia was a Microsoft premier Windows Phone partner.

Microsoft said it purchased Nokia to help the company narrow the gap between it and its rivals by offering affordable, entry-level mobile devices to customers.

In October 2014, Microsoft announced that it was rebranding its Nokia nameplate as Microsoft Lumia, while moving away from the Nokia nameplate.

As part of the Nokia acquisition, Microsoft announced in July 2014 that it would eliminate some 18,000 jobs, including a substantial chunk of about 12,500 workers at the handset company, according to an earlier eWEEK report.

Nokia, meanwhile, has been making some moves on its own since selling its handset business to Microsoft. On April 15, Nokia announced that it will buy Alcatel-Lucent in a $16.6 billion deal that is expected to create a significant player in a rapidly evolving networking market dealing with such fast-moving trends as mobile computing, the cloud, the Internet of things and software-defined networking.

Talk about Nokia's possibly acquiring Alcatel-Lucent began at least two years ago, after Nokia bought out Siemens' half of the companies' joint venture and had agreed to sell its struggling handset business to Microsoft. The announcement of the deal comes less than 24 hours after officials with both vendors said they were in advanced negotiations, though they had cautioned that an agreement wasn't certain.

The melding of the two vendors will create a company that in 2014 had a combined $27.5 billion in sales and $2.45 billion in profit, more than $5 billion in R&D and net cash of almost $7.9 billion. Nokia will see its addressable market increase by 50 percent, to more than $138 billion, officials said.

The boards of directors of both firms have approved the deal, and it now needs Nokia shareholder approval as well as the go-ahead from government regulators. The deal is expected to close in the first half of 2016.