Nokia brand to emerge from Microsoft's shadow as Surface Phone rumours grow

Nokia smartphones and tablets could soon be back on the market thanks to a licensing deal between the Finnish firm and a startup called HMD Global.

At the same time, Microsoft is apparently offloading the rump of the Nokia phone business it acquired in 2013 to China-based Foxconn, and may develop a Surface Phone to complement its tablet devices.

Nokia, once the largest phone maker in the world, sold its handset business to Microsoft after seeing its market share eaten up by competition from Apple's iPhone and Android-based devices.

The firm has now announced a strategic agreement that grants HMD Global, a newly founded company also based in Finland, an exclusive global licence to create Nokia-branded mobile phones and tablets for the next 10 years.

HMD's new smartphone and tablet portfolio will be based on Android, the firm said, and to complete its Nokia branding portfolio HMD has conditionally agreed to acquire the rights from Microsoft to use the Nokia brand on feature phones as well as smartphones, a deal set to close in the second half of this year.

Meanwhile, in a related move, Microsoft is apparently selling the remainder of its feature phone business assets, including manufacturing, sales and distribution, to China-based Foxconn Technology Group.

Furthermore, HMD and Nokia have signed an agreement with Foxconn to collaborate on the building of a global business for Nokia-branded mobile phones and tablets.

Overall, the agreements give HMD full control of sales, marketing and distribution of Nokia-branded mobile phones and tablets, with access to the sales and distribution network Foxconn will acquire from Microsoft.

The deal will also give HMD access to Foxconn's manufacturing, supply chain and engineering capabilities, which would seem to imply that Foxconn will manufacture the new Nokia-branded devices for HMD.

Nokia said that it will provide HMD with branding rights and licences for its cellular network technology in return for royalty payments, but will not make a financial investment in HMD. However, it will take a seat on the HMD board.

HMD is set to be led by Arto Nummela as chief executive, who is currently the head of Microsoft's Mobile Devices business for Asia, Middle East and Africa, and a former senior executive at Nokia.

"Today marks the beginning of an exciting new chapter for the Nokia brand in an industry where Nokia remains a truly iconic name," said Ramzi Haidamus, president of Nokia Technologies.

"Working with HMD and [Foxconn] will let us participate in one of the largest consumer electronics markets in the world while staying true to our licensing business model."

The move means that Microsoft will soon have almost completely divested itself of the assets gained from the Nokia acquisition in 2013. That purchase was partly because Nokia had become the largest maker of Windows Phone handsets after starting a partnership with Microsoft to sell these in 2011.

A growing number of rumours now suggest that Microsoft may ditch its Lumia smartphones in favour of a new line of Surface Phone devices. The firm could be aiming to reproduce the success it has enjoyed in developing and selling its own brand of Surface tablet system.

Source: Nokia brand to emerge from Microsoft's shadow as Surface Phone rumours grow