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Finnish firm brokers brand licensing deal with HMD Global, while Microsoft sells feature phone assets to related Foxconn unit.
The Nokia name is set to return to the mobile phone market after the Finnish vendor brokered a brand and IP licensing deal with HMD Global, which intends to launch a range of Nokia-branded phones and tablets.
The deal means Finland-based HMD is licensed to create Nokia-branded mobile phones and tablets for the next 10 years. The licence is exclusive, with the exception of the Japanese market, Nokia said.
Under the terms of the agreement, Nokia Technologies, the vendor’s intellectual property division, will receive royalty payments from the sales of the devices.
In a separate transaction, HMD has agreed to acquire from Microsoft the rights to use the Nokia brand on feature phones. It expects the transaction to close in the second half of this year. The two deals together make HMD the sole global licensee for all types of Nokia-branded mobile phones and tablets, HMD said.
Furthermore, Microsoft said it has brokered a deal to sell its entry-level feature phone assets to FIH Mobile, a subsidiary of Taiwan’s Hon Hai/Foxconn and HMD Global for US$350 million (€310 million); FIH Mobile will also acquire Microsoft’s mobile manufacturing facility in Vietnam.
Upon closure of the deal, around 4,500 Microsoft employees will have the opportunity to join FIH Mobile or HMD Global, Microsoft said.
HMD said it will invest $500 million over three years to support the global marketing of Nokia-branded mobile phones and tablets, with the funding coming from investors and the profits it generates from the newly-acquired feature phone business.
However, it did not specify when it expects the first Nokia mobile phones to hit the shelves.
"We will be completely focused on creating a unified range of Nokia-branded mobile phones and tablets, which we know will resonate with consumers," said Arto Nummela, CEO-designate of HMD, in a statement.
Nummela is currently head of Microsoft’s Mobile Devices business for Greater Asia, Middle East and Africa, and of its global feature phones business, but has previously served in senior positions at Nokia. He will take up his new role when the Microsoft deal closes.
"Branding has become a critical differentiator in mobile phones, which is why our business model is centred on the unique asset of the Nokia brand and our extensive experience in sales and marketing," Nummela said.
The Nokia name disappeared from the mobile market as a result of the Finnish vendor’s decision to sell its devices business to Microsoft just over two years ago.
In the interim there has been much talk of brand licensing deals. Nokia unveiled an own-brand Android tablet, made by Foxconn, in late 2014 and last summer confirmed that it was looking for a partner for mobile phones too.
"Today marks the beginning of an exciting new chapter for the Nokia brand in an industry where Nokia remains a truly iconic name," said Ramzi Haidamus, president of Nokia Technologies, in a statement on Wednesday.
"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.
