Nokia returns to the market as a Finnish smartphone and tablet maker. A former employee of Nokia and Microsoft has founded HMD Global Oy, buys the exclusive rights to the Nokia brand name and, together with a Foxconn subsidiary, takes over the feature phone branch of Microsoft.
Microsoft sells its Nokia Asha phone business to FIH Mobile and HMD Global Oy. The acquisition involves an amount of 350 million dollars, which is approximately 310 million euros. FIH Mobile is a subsidiary of Foxconn. The deal does not cover the Lumia smartphones. Microsoft emphasizes that the company will continue to develop Windows 10 Mobile itself and will continue to support Lumia’s. After the acquisition of Nokia, however, Microsoft also released feature phones, simple and cheap devices that are sold under the Nokia and Nokia Asha brand names.
Arto Nummela is at the helm of the new Finnish company HMD Global Oy. He previously worked for Nokia and until recently held a senior position in the Microsoft Mobile division in Asia. The new company was established to market phones and tablets exclusively under the Nokia brand name.
Nokia itself posted a short explanation on its website, in which the company writes that Nokia Technologies has granted an exclusive worldwide license to HMD to make a full line of smartphones, tablets and featurephones under the Nokia brand. The license is valid for ten years. It is not known whether HMD pays any amount to Nokia Technologies, but it is clear that HMD provides royalties for the use of the brand name and intellectual property per product sold.
According to Nokia, HMD’s new Nokia products will use Android, but the company emphasizes that HMD still has a lot of work to do and that it will take “a little longer” before new Nokia smartphones and tablets will appear.
HMD says the new company plans to invest more than $500 million in bringing Nokia-branded products to market over the next three years. That money must come from investors and from income that the company expects from the acquisition of the feature phone branch of Microsoft. Through this acquisition, HMD will acquire the rights to use the Nokia name on feature phones until 2024.
Part of the deal is that Foxconn subsidiary FIH Mobile will take over the feature phone factory in Vietnam from Microsoft. The manufacturing facility is sold including rights to the brand names, software and services, service network, contracts with customers and suppliers. FIH Mobile will take over the production, the 4500 employees of the factory will be offered the opportunity to continue their work for the new owner. Microsoft expects the acquisition to close in the second half of this year, pending regulatory approval.