Nokia planning to re-enter mobile phone business, but through brand-licensing model
Merely a couple of months after denying the development, Nokia on late Monday finally confirmed its plans to re-enter mobile phone business. The Finnish giant is looking to make its return using a brand-licensing model and as earlier revealed by CEO Rajiv Suri, the first mobile handset from the new development would be announced as early as 2016.
Nokia sold its Devices and Services business to Microsoft in April last year after facing huge losses due to declining sales. The agreement between both the companies restricts the former to manufacture mobile devices. Thus, the company is looking for a “right partner” who would have manufacturing, marketing and channel distribution capabilities to kick-start the new development.
“The right path back to mobile phones for Nokia is through a brand-licensing model. That means identifying a partner that can be responsible for all of the manufacturing, sales, marketing and customer support for a product,” said Robert Morlino, a spokesman for Nokia Technologies.
The brand-licensing model would be similar to what the company did in the past with launching the Nokia N1 Android tablet. This certainly confirms that the company is set to use its brand name for making new mobile handsets, but their manufacturing as well as marketing and sales support will likely to be in the hand of a partner.
The handset featuring Nokia’s brand would not hit the stores anytime before the fourth quarter of 2016 as Microsoft has the rights to restrict the use of the brand name. However, Nokia would come up with its first device soon thereafter to make its return to the mobile phone market.
Nokia has not yet revealed any details about which operating system would it use on its mobile phones. But considering the market demand, it is expected to be Google’s Android.
Earlier this month, Microsoft announced to write off $7.6 billion of the Nokia deal which it signed back in September 2013. The company is in development to change its mobile handset business, which consists Windows Phone running Lumia devices, and is set to limit the development of its mobile phone hardware to enhance its focus on software.