This brand you like will come back in style. May be.
Today, Nokia announced that it will license its brand to a new Finnish company founded by former Nokia executives. The company, Global HMD, plans to use the Nokia brand to sell Android phones and tablets.
Meanwhile, Microsoft, which acquired Nokia’s line of handsets in 2014, is selling its line of phones to manufacturing giant Foxconn’s FIH subsidiary for $350 million. These “dumb phones” will also be branded Nokia; HMD will sell and market them for FIH (get it?).
Although Nokia doesn’t make the phones itself, the HMD deal marks a major comeback for the Nokia name. Nokia exited the phone business entirely after its $7 billion deal with Microsoft. Needless to say, the acquisition did not propel Microsoft into the top group of mobile phone manufacturers. The tech giant retired the Nokia brand and eventually canceled the entire sale as a massive loss.
Since the sale of its telephony business, Nokia has mainly focused on the lucrative telecommunications infrastructure market, buying rival Alcatel-Lucent earlier this year for $16.6 billion. But the company has not completely abandoned electronics. Its Nokia Technologies division manufactures an Android-based tablet for the Chinese market. And last month the company acquired French gadget maker Withings in a deal that signaled that Nokia’s ambitions to get back into consumer electronics were on the rise.
In the meantime, Nokia’s focus on telecommunications equipment seems to be working well. But the brand has not been known to the general public for a while. The HMD deal could change that. Otherwise, it will not have cost Nokia much, at least compared to the purchase of Alcatel-Lucent. Consider getting back into phones as Nokia hedges its bets.