Nokia Reportedly Plans To Tiptoe Back Into Smartphone Market In 2016
Nokia finalized a sale of its mobile phone business to Microsoft last year for $7.2 billion, and though it was reported that Microsoft negotiated the rights to use the Nokia brand on mobile products for the next decade, by November of 2014, Microsoft released its first Lumia handset without the Nokia label. Less than five months later, there's talk that Nokia wants back in the game.
According to Recode and the "two sources briefed on Nokia's plans," the Finnish company is planning to once again compete in the mobile space as early as next year. The comeback would be under the operation of Nokia Technologies, the smallest of the three companies that remained after the lucrative Microsoft deal.
Here's where things get interesting. Though Microsoft negotiated the rights to use the Nokia brand for 10 years, it mostly applies to lower end phones based on the S30 an S40 operating systems. As for smartphones, Microsoft only received the rights to Nokia's brand for existing Windows Phones, hence why it was able to launch gold editions of the Nokia Lumia 830 and 930 handsets earlier this year.
More importantly, Nokia finds itself nearing the end of its contract with Microsoft that prevents it from selling its own brand handsets. That expires at the end of this year, at which point Nokia can again sell its own brand smartphones, and by the third quarter of next year, it will again be allowed to license its brand to other companies.
The latter is the road Nokia will likely take, as it sold off much of its manufacturing operations to Microsoft. Rather than rebuild, it makes more sense to design interesting phones and the license them to companies that are better equipped to run with the design.
According to Recode and the "two sources briefed on Nokia's plans," the Finnish company is planning to once again compete in the mobile space as early as next year. The comeback would be under the operation of Nokia Technologies, the smallest of the three companies that remained after the lucrative Microsoft deal.
Here's where things get interesting. Though Microsoft negotiated the rights to use the Nokia brand for 10 years, it mostly applies to lower end phones based on the S30 an S40 operating systems. As for smartphones, Microsoft only received the rights to Nokia's brand for existing Windows Phones, hence why it was able to launch gold editions of the Nokia Lumia 830 and 930 handsets earlier this year.
More importantly, Nokia finds itself nearing the end of its contract with Microsoft that prevents it from selling its own brand handsets. That expires at the end of this year, at which point Nokia can again sell its own brand smartphones, and by the third quarter of next year, it will again be allowed to license its brand to other companies.
The latter is the road Nokia will likely take, as it sold off much of its manufacturing operations to Microsoft. Rather than rebuild, it makes more sense to design interesting phones and the license them to companies that are better equipped to run with the design.
