Nokia takes Circuitous Route Back to the Mobile Market

by Matt Klassen on May 19, 2016

nokiaAfter Nokia’s mobile division was acquired by Microsoft in 2013, we all wondered what the Redmond PC giant could do with the Finnish company’s tarnished mobile brand. Turns out, nothing. Under the watch of Microsoft the Nokia brand quickly faded away, a radical departure from the days when the “Nokia” name was synonymous with global cellular domination. But like a phoenix rising from the ashes, this week the Finnish tech giant announced its triumphant return to the mobile world…well sort of.

To begin this overly complicated tale, Microsoft confirmed earlier this week that it would be selling Nokia’s mobile assets to FIH Mobile, a subsidiary of Foxconn, and HMD Global, a nebulous Finnish firm that seems to be nothing but a renamed front for Nokia’s mobile interests, for $350 million, a move that allows Nokia, in some measure, to regain control of its own mobile branding, which under the original sales deal with Microsoft, the latter retained until this year.

Nokia then wasted no time in confirming its plans to re-enter the mobile phone and tablet market through a “strategic agreement covering branding rights and intellectual property licensing,” signing an agreement to allow the aforementioned FIH Mobile and HMD Global to produce Nokia branded mobile technology.

“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. “Instead of Nokia returning to manufacturing mobile phones itself, HMD plans to produce mobile phones and tablets that can leverage and grow the value of the Nokia brand in global markets. 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.”

While I doubt anything untoward is going on behind the scenes, I have to admit that this entire endeavour has the overly complicated feel of a good cloak and dagger story, with lucrative business deals mixed with front companies mixed with giant multinational monsters like Foxconn. In fact, try as I might, I’ve found it incredibly difficult to find any information on HMD Global, save for a brief Wikipedia entry that tells me that the company was established last year, seemingly for the explicit purpose of selling the Nokia brand, and the firm is headed by Arto Nummela, who has worked both at Nokia and Microsoft Mobile.

On the face of it one might argue that Nokia might need to establish such a secretive subsidiary in an effort to bypass Microsoft’s original acquisition restrictions on the “Nokia” brand, which it retained until 2016. But given that it is 2016 and Microsoft has just sold all its assets from the Nokia deal, it strikes me as overly complicated to still require a front company to legally use the Nokia brand, when Nokia could just very well buy its brand back.

All I can really gather is that Nokia desires both to re-enter the mobile market, selling devices that run Android instead of its own home-grown platforms, and to keep the mobile market at arms length, working through this HMD front and its partnership with Foxconn to produce mobile devices. But I’m having trouble determining the ‘why’.

Now as I’ve said before, perhaps it’s because the “Nokia” name, at least when it comes to mobile tech, is virtually synonymous with failure, but that doesn’t hold water given that the Nokia brand seems front and centre to this convoluted partnership.

With what little information I’ve been able to glean thus far, perhaps I can only conclude that Nokia’s desire to stay at arms length from mobile operations is due to a heretofore unseen trait, humility, a humble acknowledgement that the Finnish firm has watched the mobile market pass it by…a truly radical departure given that the very lack of such humility is what precipitated Nokia’s mobile downfall in the first place.

Did you like this post ? TheTelecomBlog.com publishes daily news, editorial, thoughts, and controversial opinion – you can subscribe by: RSS (click here), or email (click here).

Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

Previous post:

Next post: