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Can Mobile Phone Nokia Brand Rise Again?

First Posted: Dec 02, 2016 03:21 AM EST
Finnish mobile phone brand Nokia is planning a return on the market.

Finnish mobile phone brand Nokia is planning a return on the market. Credit:Facts3K Studio / YouTube

After former managers at the Finnish company Nokia licensed the handset brand from Microsoft and negotiated partnerships with phone manufacturer Foxconn and Google, Nokia is planning for a comeback.

Nokia's History

According to Fortune, Nokia was once the world's dominant mobile phone maker. The company was well-known for its unexpensive, yet robust handsets. Nokia was the most important phone brand in the market, back in its glory days. At one point the company's products convinced an entire generation to start using mobile devices.

The Finnish company experienced a huge setback with the arrival of the smartphones, especially the iPhone. Nokia basically disappeared as phone manufacturer, leaving the place vacant to other companies taking its position in the market. The company chose Microsoft's unpopular Windows operating system for its "Lumia" phone lineup and missed the shift to smartphones.

By selling its handset activities to Microsoft in 2014, Nokia quit smartphones to focus on mobile network equipment. Lumia smartphones continued being sold by Microsoft under its own name. However, this year Microsoft largely abandoned that business, as well.

The company HMD Global, led by Nokia veteran Arto Nummela, has announced its plans to launch its first Nokia smartphone in the early part of next year. The mobile device will run on Google's Android operating system.

No Funding From Nokia

Smart Connect, a private equity fund run by Jean-Francois Baril, owns HMD. Baril was once in charge of Nokia's world-leading supply chain management system.

On Thursday, Dec. 1, HMD took over the feature phone business sold by Nokia to Microsoft. The new partnership includes a licensing deal with Nokia that provides the sole use of the brand on tablets and mobile phones for the next decade.

Nokia has no direct investment in HMD and the company will pay Nokia royalties for the brand and patents. All the new Nokia devices will be manufactured by Foxconn of Taiwan and their smartphone operating system is built by HMD in partnership with Google.

Nokia Brand To Rise Again

According to Ars Technica, the new company will enter the global smartphone market in 2017 with the next generation of Nokia phones running Android. In order to succeed, Nokia smartphones will need to be able to steal market share from Samsung, Apple and other well-established players in the highly competitive mobile phone industry. But Nummela is confident in chances that Nokia will rise again. He said that even if consumers carry now different smartphones, they might not be all loyal to those brands.

The Nokia consumer brand used to be the badge for cheaper, entry-level "feature phones" sold mainly in Eastern Europe, India, and Asia. These basic phones sell for as little as $20, But smartphones typically cost anywhere from 10 to 30 times as much.

Mobile phone analyst Ben Wood of CCS Insight, said that having an established brand provides a good advantage for a new entrant on the market. According to him, those phone vendors with weaker brands have to take very seriously the new challenge.

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