After former managers at Nokia struck up partnerships with Google and phone manufacturer Foxconn and licensed the handset brand from Microsoft, the smartphones from the Finnish company are poised for a comeback.
Nokia chose Microsoft’s unpopular Windows operating system for its “Lumia” range after it missed the shift to smartphones despite once being the world’s dominant cellphone maker.
Nokia focused on mobile network equipment after selling its handset activities to Microsoft and quitting smartphones in 2014. Microsoft continued selling Lumia smartphones under its own name but this year largely abandoned that business, too.
HMD Global wants to launch its first Nokia smartphone in the early part of next year using Google’s Android operating system and is , led by Nokia veteran Arto Nummela.
But in a cut-throat industry, a dash for scale by stealing business from Apple, Samsung and dozens of other players would be required for success.
“Consumers may be carrying different smartphones now, but are they really in love and loyal to those brands?” said Nummela in an interview.
Though Microsoft invested little to market the name in recent years, The Nokia consumer brand lives on as the badge on cheaper, entry-level “feature phones” sold mainly in Asia, India and Eastern Europe. While the basic phones sell for as little as $20, typically, smartphones cost anywhere from ten to 30 times as much as these basic phones.
“For a new entrant, having an established brand provides it with an instant on-ramp,” said mobile phone analyst Ben Wood of CCS Insight, who suggested that phone vendors with weaker brands should not take the new challenge lightly.
“The barriers to entry for the Android phone space are low,” said Wood. “What HMD has is the Nokia brand and management experience. The key to its success will be driving scale.”
However there is no lack of ambition for CEO Nummela, who was once responsible for Nokia’s sales and product development.
“We want to be one of the key competitive players in the smartphone business,” he told Reuters.
HMD President Florian Seiche comes with previous experience of having worked at Siemens, Orange, HTC and Nokia. A former CEO of Rovio, the maker of the Angry Birds game, as well as a Nokia veteran, is Chief Marketing Officer Pekka Rantala.
“We are not going to skip any markets in the long term,” Seiche said, adding that HMD had already set up offices in 40 locations around the world.
Jean-Francois Baril, who was once in charge of Nokia’s world-leading supply chain management system, is the owner of Smart Connect LP, a private equity fund which in turn owns HMD. Other HMD managers have put in money of their own.
The feature phone business that Nokia Corp sold to Microsoft was taken over by HMD on Thursday. HMD obtained sole use of the Nokia brand on mobile phones and tablets for the next decade by an existing licensing deal with Nokia. While Nokia has no direct investment in HMD, the later will pay Nokia royalties for the brand and patents.
All of HMD’s Nokia devices will be manufactured by Foxconn of Taiwan, the world’s largest contract manufacturer and the company is building its smartphone operating system in partnership with Google.
(Adapted from CNBC)