Nokia has announced that it will return to the mobile phone and tablet market. As part of an agreement covering branding and intellectual property rights, Nokia Technologies will grant HMD global Oy its global license. This will allow HMD to create Nokia-branded phones and tablets for the next ten years. In return. Nokia will receive royalty payments from HMD for sales of the products. Further, the new portfolio of devices will be powered by Google’s Android OS. HMD has also acquired the rights to use the Nokia brand on feature phones, as well as certain design rights from Microsoft. The transaction with Microsoft is expected to close by the second half of 2016.
Ramzi Haidamus, president of Nokia Technologies stated, “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.”
HMD plans to invest more than $500 million over the next three years to market the Nokia-branded products. In addition, Nokia will be a part of the Board of Directors of HMD and will set “mandatory brand requirements and performance related provisions”. This is to ensure that the products match up to Nokia’s own expectations of their devices. Last year, Nokia CEO, Rajeev Suri, had said that the company is planning to licence the brand in 2016.