NOKIA was once undisputed king of the mobile phone market and now it’s hoping to regain the prestigious title.
After being dominated by current market leaders Samsung and Apple, Nokia sold its unprofitable phone in 2014 for $A9.9 billion to Microsoft — which later dropped the brand from its Lumia smartphone handsets.
After shifting its focus to telecommunications infrastructure, Nokia is ready to make its triumphant return to market with plans for “new generation” smartphones and tablets.
The company said it would licence its brand to newly-established Finnish firm HMD Global — which has been founded by former Nokia execs — to create the new product portfolio for Google’s Android.
The new company will create the Android handsets and tablets under the Nokia name.
“[HMD Global] has been founded to provide a focused, independent home for a full range of Nokia-branded feature phones, smartphones and tablets,” Nokia said in a statement.
As part of the process, HMD Global and its Taiwanese partner, FIH Mobile of FoxConn Technology Group, will take over Microsoft’s feature phone business for $A484 million, Microsoft said separately.
Nokia will be hoping to learn from its previous mistakes, which saw the company betting on Microsoft’s failed Windows mobile platform.
Analysts at the time said Nokia had failed to grasp the growing importance of smartphone apps compared to hardware.
President of Nokia Technologies Ramzi Haidamus said the deal would provide new revenues from its still valuable consumer-brand, without having to bear the financial risks related to it.
“Working with HMD and FIH will let us participate in one of the largest consumer electronics markets in the world while staying true to our licensing business model,” he said.
Nordea Markets senior analyst Sami Sarkamies said Nokia “could only win” with the deal.
“Certainly Nokia’s brand still has some appeal in some markets, but competition is harsh. However, Nokia won’t bear any of the risks,” he said.
The risks will fall on Chinese FoxConn, which will be in charge of manufacturing, sales and distribution of the new products through its subsidiary FIH.
The new company is to be led by Finn Arto Nummela who has previously held senior positions at Nokia and Microsoft.
The conditional deal between Microsoft and Nokia’s new brand-licensing partners is expected to close in the second half of 2016.
Nokia’s share advanced 2.2 per cent to 4.64 euros on the Helsinki stock exchange.