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Nokia Brand Making a Comeback to Smartphones With Newly Founded Company

by Ville-Petteri Ukonaho | 5月 18, 2016

HMDglobal, a newly founded company headquartered in Finland has agreed to license from Nokia rights and patents to produce Nokia branded smartphones globally. The agreement is for ten years and covers both brand and intellectual property rights.Smartphones and tablets will use Android operating system. 

HMDglobal also announced a deal to purchase all featurephone assets (excluding factories) from Microsoft to produce also Nokia branded featurephones.

Microsofts featurephone factories will be purchased by FIH a subsidiary of Hon Hai/Foxconn Technology Group. HMD will aquire manufacturing services from Foxconn.

Microsoft never managed to turn the tides with the devices business and is now making an exit from featurephones. Microsoft managed to sell 15.7 million featurephones during 1Q'16 but is making huge losses with the devices unit. Selling to a new player will likely boost new spirit to the featurephones business. The phones are still extremely important for the "next billion" users in the emerging markets that cannot afford even the cheapest smartphone.

This marks a new beginning for the brand that has suffered under Microsoft's control. Nokia brand still has value in some regions so there is potential in Nokia branded smartphones. However, global smartphone sales is stagnating and it will be a challenge even for a known brand to gain market share in current market situation. More from: Global Smartphone Vendor Market Share by Region: Q1 2016

Microsoft still has smartphone assets and rebranding with Surface might be a way to rejuvenate that part of the business. More from here: Q1'16: Microsoft: Shipments Tumble, But ASP Finally Improving

For our clients more in depth analysis from: Nokia Makes a Comeback with Android Phones
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