Nokia Technologies announced in a press release this morning that it has signed an agreement with HMD global to build “a new generation of Nokia-branded mobile phones and tablets.” Although we don’t know exactly what flavour of Android, or how heavily skinned it will be, Nokia’s announcement states that Google’s mobile OS will be powering the new devices.
Following a disastrous few years in the hands of Microsoft, it’s great to see Nokia’s brand live on. In the days before Android and iOS became the smartphone duopoly, Nokia was undoubtedly the biggest phone maker in the world. Its brand name was stronger than anyone’s. And now, it’s coming back, thanks to a newly-founded company called HMD, which was founded purely to give the Nokia brand a new home.
HMD has been founded to provide a focused, independent home for a full range of Nokia-branded feature phones, smartphones and tablets. To complete its portfolio of Nokia branding rights, HMD announced today that it has conditionally agreed to acquire from Microsoft the rights to use the Nokia brand on feature phones, and certain related design rights. The Microsoft transaction is expected to close in H2 2016. Together these agreements would make HMD the sole global licensee for all types of Nokia-branded mobile phones and tablets. HMD intends to invest over USD 500 million over the next three years to support the global marketing of Nokia-branded mobile phones and tablets, funded via its investors and profits from the acquired feature phone business.
As well as doing a deal with Microsoft to acquire the Nokia brand-name and technology rights, the company has also signed an agreement with FIH Mobile Limited (FIH), a Foxconn subsidiary, to assemble, sell and distribute the devices. FIH acquired the remaining feature phone assets from Microsoft, which includes sales, distribution and manufacturing.
This agreement will give HMD full operational control of sales, marketing and distribution of Nokia-branded mobile phones and tablets, with exclusive access to the pre-eminent global sales and distribution network to be acquired from Microsoft by FIH, access to FIH’s world-leading device manufacturing, supply chain and engineering capabilities, and to its growing suite of proprietary mobile technologies and components.
More than likely to avoid possible problems with Microsoft, Nokia will not be making any financial investments in HMD, but will receive royalties in return for patent licences and branding rights from the newly-formed company. Nokia Technologies will also take a seat on the board of directors of HMD, and will set brand, performance and build quality requirements to make sure that Nokia-branded phones meet customer expectations.
Once the Microsoft deal closes this quarter, Arto Numella — current head of Microsoft’s Mobile Devices business in Greater Asia, Middle East and Africa and former senior member of Nokia’s team — will be named as CEO of HMD. In a statement regarding today’s announcement, Numella said:
“We will be completely focused on creating a unified range of Nokia-branded mobile phones and tablets, which we know will resonate with consumers. 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.”
He will be joined by Florian Seiche, current SVP for Europe Sales and Marketing at Microsoft Mobile, and former senior member of Nokia, HTC and other top brands. With this, and the recent deal to acquire Withings, Nokia will hopefully have a broad ecosystem full of smartphones, tablets and fitness trackers.
TL;DR – Nokia basically just found a way to reform itself legally, bring senior staff back, and start making Android phones. Technically, of course, that’s not what happened. HMD is a brand new company. It just happens to be making Nokia-branded phones exclusively, and have some former Nokia and Microsoft people leading it to make Android devices, which it arguably should have done as soon as it was obvious that Symbian OS was not the future of smartphones. Hindsight is a wonderful thing.