The Finnish multinational communications and information technology company Nokia announced on Wednesday 18 that it had signed a deal for 10 years with the company HMD Global, independently licensing its brand for mobile phones and tablets, and a subsidiary of Taiwan’s Foxconn will manufacture the devices.
The company Nokia, which was once the largest manufacturer in the world of mobile phones, sold its handset business to the tech giant Microsoft in 2014.
Nokia Back To The World Of Mobile Phones Through Brand Licensing
However, the company got its patent and began preparing a return to the market through brand licensing, and currently, the company gets most of its revenue from telecommunications equipment.
Nokia HMD will receive royalty payments related to selling products with its brand. “Instead of the Nokia back to produce cell itself, the HMD plans to produce mobile phones and tablets that can enlarge the Nokia brand value in global markets,” said Ramzi Haidamus, head of Nokia’s patent unit.
The HMD also reached with the tech giant Microsoft for access to Nokia’s portfolio. On Wednesday, before Nokia announced its return to the mobile phone market, the company announced the purchase of a basic cell area, known as “feature phones”. Besides, FIH Mobile, a subsidiary of Foxconn, will pay US $350 million.
As part of the agreement, HMD will buy Microsoft’s Nokia brand to use rights in basic mobile phones by 2024.
The company, HMD, said, “Together, these agreements will make HMD the only global licensed for all types of phones and tablets with the Nokia brand”.
The HMD is a newly established company controlled by Smart Connect, an investment fund managed by Jean-Francois Baril, a former employee of Nokia.
Hence, the company Nokia did not give details about the releases of new handsets. But, the agreement between the tech giant Microsoft and the HMD will be completed in the second half of 2016.
Moreover, the tech giant Microsoft stated, “It has struggled with its cell division and last year recorded a write-down of $ 7.5 billion related to assets purchased from Nokia, notwithstanding the announced agreement”. Hence, it will continue to develop the Lumia line of smartphones.