Nokia Returns To Making Mobile Phones

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Nokia stand MWC 2016

Famous Finnish brand returns, but can it hope to compete against the Samsung and Apple powerhouses?

A Finnish company is about to return to the cut-throat mobile phone market with devices branded with the world famous Nokia name.

Newly created HMD Global Oy will begin selling a range of Android-based smartphones and tablets in 2017, after it signed agreements with both Google and phone maker Foxconn.

What makes this special is that HMD Global signed a strategic partnership with Nokia Technologies in May, granting it the sole use of the brand and patent licensing over the next 10 years.

Nokia 105 (1)Nokia Reborn

It should be remembered in May Microsoft had sold its feature phone business to Foxconn subsidiary FIH and HMD Global for $350 million (£242m).

And now HMD said in a statement today that its leadership team, made up of former Nokia executives, intend to become significant player in the global smartphone market.

“HMD will bring a new generation of mobile phones to consumers, with the first smartphone products set to be launched in the first half of 2017, alongside the existing Nokia branded feature phone business,” it said in a statement.

“Future Nokia smartphones will utilise Google’s Android operating system, currently deployed on 86 percent of the world’s smartphones,” it said.

The firm said is developing “an exciting new consumer centric product range which will focus on innovation, quality and experience, alongside the iconic Nokia mobile phone attributes of design, robustness, and reliability.”

“Today marks a happy and important day for HMD. Nokia has been one of the most iconic and recognisable phone brands globally for decades. The excitement of re-introducing this much-loved, well-known and trusted brand to smartphone consumers is a responsibility and an ambition that everyone at HMD shares,” said Arto Nummela CEO of HMD Global.

“Driven by the extremely positive reception we have received since HMD was announced earlier this year, we are excited about building the next chapter for Nokia phones,” said Nummela. “We see this as a brilliant opportunity to solve real life consumer problems and to deliver on the quality and designs that the Nokia brand has been always known for.”

“We believe that the time is right for renewal in the mobile industry,” added Florian Seiche President of HMD Global. “The market is fatigued and flooded with undifferentiated products. With our passionate team, start up attitude, a brand with a 95 percent worldwide awareness and a unique, asset light partnership approach, we believe we are perfectly placed to forge a new way in mobile.”

HMD is owned by Smart Connect LP, a private equity fund run by Jean-Francois Baril, who was once in charge of Nokia’s world-leading supply chain management system.

Brutal Gutting

The tale of Nokia can be described by industry watchers as tragic. It should be remembered that Nokia was the world’s leading mobile and smartphone manufacturer for many years.

But it badly misjudged the arrival of the iPhone in 2007 and for too long Nokia was overly confident that its size meant it could not be challenged by rivals, and that people were prepared to accept the severe limitations of the Symbian operating system.

But the rivals did challenge Nokia and it rapidly lost ground to both Samsung and Nokia from 2010 onwards. In 2014 Microsoft begrudgingly acquired Nokia’s smartphone business for £4.6 billion, as its ‘Lumia’ phones were the flagship range for Redmond’s Windows Phone operating system.

Nokia Lumia 920 2Microsoft at the time pledged to create a “mobile-first and cloud-first world,” but CEO Satya Nadella rapidly lost faith in the mobile business after a number of ill-received Windows Phone devices.

Microsoft then began a brutal headcount reduction at its Nokia unit. In 2014 for example it axed a staggering 18,000 jobs.

Then in 2015 it confirmed it was shutting down Nokia’s former handset development plant in Salo, Finland with the loss of up to 2,300 jobs. Former Nokia CEO Stephen Elop also departed the company.

And in July 2015 Microsoft announced that it would make another 7,800 worldwide cuts, following the write-off of £4.9 billion worth of assets relating to the Nokia acquisition.

In May this year 1,850 jobs losses were cut, closely followed by 2,850 job cuts in July.

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Author: Tom Jowitt
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