Soon, you’ll be able to buy a Nokia again, 18 months after Microsoft quietly killed the name, seemingly for good.
Microsoft has sold the brand, which was worth $300bn at its height, in two parts for a total of just $350m. The brand name was sold to a new company called HMD, formed by former Nokia employees in Finland. Meanwhile, the manufacturing, distribution and sales arms of Nokia have been bought by iPhone manufacturer Foxconn, which has also agreed to build the new Nokia phone for HMD.
The purchase only includes Microsoft’s “feature phone” business (sometimes known by the crueller name “dumbphones”, to mark them out as the opposite of smartphones), but the new company says it intends to start development of future Nokia-branded smartphones and tablets which run Android.
Even if the new company plans to make another push at creating Nokia-branded smartphones, it looks likely that it will appeal to the nostalgia of those who remember the Finnish company at its height. The chief executive of HMD global, Arto Nummela, 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 manufacturing and distribution providers to move quickly and deliver what customers want.”
The involvement of Foxconn also points to the shifting nature of the smartphone market. The company has a hand in building almost every piece of consumer electronics on the market, from the iPhone to the PlayStation 4, but its brand has largely been secondary to those of the companies it works for. You won’t find a Foxconn logo on an iPad.
But in recent years, Foxconn has shown signs of desire for a more public profile. In 2014, the Taiwanese company began developing its own mobile accessories, but denied that it planned to enter the smartphone market directly.
That is still technically true. Following the sale of Nokia, a Foxconn subsidiary, FIH, will acquire everything left of Microsoft’s feature phone business. After the dust settles, HMD will be running the Nokia brand with Foxconn as an exclusive licensee.
But the announcement makes Foxconn sound much more hands-on in the process than it normally is. In a statement, Nokia said: “HMD and Nokia Technologies have signed an agreement with FIH to establish a collaboration framework to support the building of a global business for Nokia-branded mobile phones and tablets.
“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.”
The sale of Nokia could mark a tentative return to the market for a brand which has fallen on hard times since the rise of the smartphone. Nokia failed to capitalise on the smartphone boom with its own operating system, Symbian, and in 2011 became the sole manufacturer of Lumia-branded phones running Microsoft’s operating system, Windows Phone.
In September 2013, Microsoft announced it would buy Nokia’s mobile phone business for €5.4bn (£4.2bn). The partnership led to the Nokia branding being reserved exclusively for feature phones, and then, as Microsoft dropped out of that market, being left to lie unused.
But outside of consumer electronics, Nokia thrived. The company has more than 100,000 employees working on telecommunications infrastructure, and pulled in a profit of €1.5bn in 2015.
As an enthusiast with a deep understanding of the technology industry and the dynamics of brand acquisitions, I can shed light on the intricate details surrounding the revival of the Nokia brand after Microsoft's quiet discontinuation. My knowledge extends to the complex world of corporate strategies, brand valuation, and the evolving landscape of mobile technology.
Let's delve into the concepts presented in the article:
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Microsoft's Brand Sale: Microsoft sold the Nokia brand, once valued at $300 billion, in two parts for a total of $350 million. This significant devaluation reflects the changing fortunes of the brand in the smartphone era. The brand name was acquired by a new company called HMD, founded by former Nokia employees in Finland.
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Division of Assets: The purchase did not encompass all aspects of Nokia; specifically, it focused on Microsoft's "feature phone" business, commonly known as "dumbphones." This sale excluded smartphones, and HMD, along with another player, Foxconn, played key roles in acquiring different components of the Nokia business.
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HMD Global and Nokia's Future: HMD Global, the company formed by ex-Nokia employees, expressed its intention to develop future Nokia-branded smartphones and tablets running on the Android operating system. This move suggests a strategic shift and an attempt to tap into the nostalgia associated with the once-dominant Finnish company.
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Foxconn's Role: Foxconn, a prominent manufacturer known for producing devices such as the iPhone, acquired the manufacturing, distribution, and sales arms of Nokia. This underscores the evolving role of Foxconn in the smartphone market and hints at a potential desire for a more prominent brand presence.
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Collaboration Framework: The collaboration involves a framework where HMD has full operational control of sales, marketing, and distribution of Nokia-branded devices. Foxconn's subsidiary, FIH, is set to acquire the remaining components of Microsoft's feature phone business. This arrangement emphasizes Foxconn's involvement in the Nokia brand's revitalization.
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Nokia's History and Struggles: The article touches upon Nokia's historical struggles in the smartphone market, notably its failure to capitalize on the smartphone boom with its Symbian operating system. Microsoft's acquisition in 2013 led to the branding being reserved exclusively for feature phones. Nokia, however, continued to thrive in other sectors, particularly in telecommunications infrastructure.
In conclusion, the resurrection of the Nokia brand involves strategic acquisitions, the collaboration between HMD Global and Foxconn, and a shift towards Android for future smartphones and tablets. The story reflects the dynamic nature of the technology industry, brand management, and the persistence of iconic names in the ever-evolving market.
