Group of former Nokia executives licenses the brand name from Microsoft and Nokia to make Android smartphones
o you pine for the days of your Nokia 3210? When phones were simple and the Finish company was cutting edge?
That’s the kind of nostalgia that the Nokia brand will be banking on when it returns to the smartphone market next year, after selling out to Microsoft in 2013.
A company set up by former Nokia employees called HMD Global has licensed the Nokia brand name from Microsoft, struck partnerships with device manufacturer Foxconn and intends to launch an Android smartphone in the early part of 2017.
The head of HMD Global, Arto Nummela, said: “Consumers may be carrying different smartphones now, but are they really in love and loyal to those brands?”
HMD Global will be looking to stir nostalgia in an effort to challenge the big and small players of the highly competitive smartphone market, dominated by Samsung and Apple, as well as Chinese brands such as Huawei.
Nummela said: “We want to be one of the key competitive players in the smartphone business.”
That road will be tough from a standing start, but brand power might be an edge against lesser-known rivals.
“For a new entrant, having an established brand provides it with an instant on-ramp,” said Ben Wood from analysts CCS Insight. “The barriers to entry for the Android phone space are low.
“What HMD has is the Nokia brand and management experience. The key to its success will be driving scale.”
After the sale of the Nokia phone business to Microsoft in 2014 and the cull of the Nokia brand from Microsoft’s Lumia range of smartphones, the consumer brand lived on as a maker of feature or so-called dumb phones, mainly for Asia, India and eastern Europe.
HMD took over the Nokia feature phone business from Microsoft on Thursday following the sale of the business in May. It has a licensing deal with Nokia giving it sole use of the brand on mobile phones and tablets for the next decade. It will pay Nokia royalties for the brand and patents, but Nokia has no direct investment in HMD.
Instead, filled with ex-Nokia personnel, and executives from Siemens, Rovio and others, HMD is owned by Smart Connect LP, a private equity fund run by Jean-Francois Baril, who was once in charge of Nokia’s world-leading supply chain management system. Other HMD managers have put in money of their own.
Shipments of Nokia feature phones plunged 40% in 2015 and HMD must reverse that decline while trying to break back into the smartphone market, where hundreds of vendors compete by selling phones that can be hard to distinguish.
Nummela says his team’s enduring relationships with phone service providers and retailers could help HMD quickly convince owners of Nokia feature phones to upgrade in markets like India, Indonesia and Russia.
In the UK and other smartphone-dominated markets, Nokia smartphones will have to overcome the various contenders for the world number three spot, currently held by the rising Huawei.