It's official: Nokia phones are making a comeback

2016-05-18 15:10 - Gareth van Zyl, Fin24
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Nokia (Picture: AFP)


Johannesburg - Iconic mobile phone brand Nokia is being revived after software giant Microsoft killed it off.

Microsoft bought Nokia’s phone making business for $7bn in 2014.

At the time of the deal, Microsoft hoped to enter into the mobile hardware space to help boost adoption of its Windows operating system for smartphones.

However, Microsoft quickly moved to kill off the Nokia brand, which meant that Nokia’s technology found its way into devices under the Microsoft brand name.

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Microsoft has since had a rethink about its smartphone-making business. The company’s CEO, Satya Nadella, late last year admitted that Microsoft’s share of the smartphone market is too low.

Amid these developments, Nokia as a company has still existed separately to Microsoft but it has only specialised in the likes of networking equipment after it sold its phone business to Microsoft.

But Nokia is now reclaiming its mobile phone brand with the help of a new partnership.

“Nokia has announced plans that will see the Nokia brand return to the mobile phone and tablet markets on a global basis,” said Nokia in a statement on Tuesday.

“Under a strategic agreement covering branding rights and intellectual property licensing, Nokia Technologies will grant HMD global Oy (HMD), a newly founded company based in Finland, an exclusive global license to create Nokia-branded mobile phones and tablets for the next ten years.

“Under the agreement, Nokia Technologies will receive royalty payments from HMD for sales of Nokia-branded mobile products, covering both brand and intellectual property rights,” said the company.

Nokia said that HMD has conditionally agreed to acquire the brand’s rights. The Microsoft transaction is expected to close in second half of 2016, said Nokia.

“Nokia will provide HMD with branding rights and cellular standard essential patent licenses in return for royalty payments, but will not be making a financial investment or holding equity in HMD,” explained Nokia.  

“Nokia Technologies will take a seat on the Board of Directors of HMD and set mandatory brand requirements and performance related provisions to ensure that all Nokia-branded products exemplify consumer expectations of Nokia devices, including quality, design and consumer focused innovation,” added the company.

Nokia further said that once the HMD-Microsoft transaction closes, HMD’s CEO will be Arto Nummela who previously held senior positions at Nokia and is currently the head of Microsoft's Mobile Devices business for Greater Asia, Middle East and Africa.

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