Former mobile phone manufacturer Nokia has signed a deal that’ll see a new Finnish company producing Nokia-branded mobile phones and tablets.
The new company – HMD global – is being granted an exclusive branding and intellectual property licence to create Nokia-branded mobile phones and tablets for the next ten years. This will apply worldwide with the exception of Japan. Nokia will receive royalty payments for the sale of these products.
HMD is also working with Microsoft to acquire the rights to use the Nokia brand on feature phones; this deal is expected to be finalised later in 2016.
Over $500 million (around £343 million) is expected to be invested by HMD over the next three years to support the global marketing of its Nokia-branded devices, which will run on the Android operating system.
In a separate announcement, FIH Mobile Limited - a subsidiary of the Foxconn Technology Group (which is also known as Hon Hai Precision Industries) – has agreed to acquire Microsoft’s remaining feature phone business assets, including manufacturing, sales and distribution. HMD and Nokia have signed an agreement that’ll see them working with FIH to build a global business for Nokia-branded mobile phones and tablets. Microsoft will gain $350 million from the deal, with around 4,500 employees expected to be transferred (or offered the opportunity to join) either FIH or HMD. The development of Windows 10 Mobile and Lumia smart phones will not be affected.
Once the Microsoft deal is concluded, HMD will be led by Arto Nummela: a former Nokia employee who’s currently the head of Microsoft's global Feature Phones business and is also head of Microsoft's Mobile Devices business for Greater Asia, Middle East and Africa. President of HMD will be Florian Seiche, currently Senior Vice President for Europe Sales and Marketing at Microsoft Mobile. Nokia Technologies will have a seat on the Board of Directors of HMD.
Ramzi Haidamus, president of Nokia Technologies, said “Today marks the beginning of an exciting new chapter for the Nokia brand in an industry where Nokia remains a truly iconic name. 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.”