After Microsoft announced that it has reached an agreement to sell the company’s entry-level feature phone assets to FIH Mobile, which is a subsidiary of Hon Hai / Foxconn Technology Group, and HMD Global for US $350 million, Nokia has announced that they have signed a strategic brand and intellectual property licensing agreement, that will enable HMD global to make new generation of Nokia-branded mobile phones and tablets. Hence, it will allow the Nokia brand to return to the mobile phone and tablet markets globally. Recently, Nokia has also announced that it will acquire Withings, a popular company that offers digital health products and services, for 170 million euros (US $191 million) in cash. The whole transaction is expected to be closed by early Q3, 2016.
“Under a strategic agreement covering branding rights and intellectual property licensing, Nokia Technologies will grant HMD global, a newly founded company based in Finland, an exclusive global license to create Nokia-branded mobile phones and tablets for the next ten years. It will receive royalty payments from HMD for sales of Nokia-branded mobile products, covering both brand and intellectual property rights.”, said the company.
HMD has been founded to provide a focused, independent home for a full range of Nokia-branded feature phones, smartphones and tablets. To complete its portfolio of Nokia branding rights, HMD announced today that it has conditionally agreed to acquire from Microsoft the rights to use the Nokia brand on feature phones, and certain related design rights. The Microsoft transaction is expected to close in H2 2016. HMD intends to invest over USD 500 million over the next three years to support the global marketing of Nokia-branded mobile phones and tablets, funded via its investors and profits from the acquired feature phone business.
According to the company, “Nokia will provide HMD with branding rights and cellular standard essential patent licenses in return for royalty payments, but will not be making a financial investment or holding equity in HMD. Nokia Technologies will also take a seat on the Board of Directors of HMD and set mandatory brand requirements and performance related provisions to ensure that all Nokia-branded products exemplify consumer expectations of Nokia devices, including quality, design and consumer focused innovation.”
On this announcement, Ramzi Haidamus, President of Nokia Technologies, said:
“Today marks the beginning of an exciting new chapter for the Nokia brand in an industry where Nokia remains a truly iconic name. Instead of Nokia returning to manufacturing mobile phones itself, HMD plans to produce mobile phones and tablets that can leverage and grow the value of the Nokia brand in global markets. Working with HMD and FIH will let us participate in one of the largest consumer electronics markets in the world while staying true to our licensing business model.”
Arto Nummela, CEO-designate of HMD, said:
“We will be completely focused on creating a unified range of Nokia-branded mobile phones and tablets, which we know will resonate with consumers. Branding has become a critical differentiator in mobile phones, which is why our business model is centered on the unique asset of the Nokia brand and our extensive experience in sales and marketing. We will work with world-class providers in manufacturing and distribution to move quickly and deliver what customers want.”
Vincent Tong, Chairman of FIH, added:
“We are looking forward to fostering a strong and long-term collaboration with HMD global and Nokia. We are impressed by the experience and expertise of the HMD management team and are committed to supporting them with our manufacturing, technology and supply chain capabilities, to capture market opportunities together in the future.“