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Nokia smartphones are going to make a rebound with another venture that will rejoin the Nokia brand with veteran Nokia officials who intend to move into smartphones benefiting from existing operation that sells low-cost basic phones. HMD Global, another Finnish organization set up to restore the Nokia phone brand, on Thursday assumed control over the basic phone business which Nokia Corp sold to Microsoft in 2014.
Nokia now to a great extent makes telecom network equipment. HMD, officially established six months ago, opens for business this month. It has a few favorable circumstances over other new companies, including Nokia's solid worldwide brand, experienced administration and Foxconn as a manufacturing partner. But it also has hurdles to overcome if it is to break into a crowded smartphone market dominated by models from scores of different players using Google's Android platform. "The barriers to entry for the Android phone space are low,"mobile phone analyst Ben Wood of CCS Insight said. "What HMD has is the Nokia brand and management experience. The key to its success will be driving scale."
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HMD has a licensing deal Nokia giving it the sole utilization of the Nokia brand on mobile phones and tablets for the following decade and key cellular patent licenses, for which it will pay royalties to Nokia, which has no investment in HMD. As part of the plan, HMD has consented to rely on Foxconn, the world's biggest contract manufacturer, to fabricate all its Nokia gadgets. HMD said it plans to present new Nokia Android smartphones in the first half of 2017.
"We want to be one of the key competitive players in the smartphone business," chief executive Arto Nummela told Reuters. Samsung and Apple are now big players, although Chinese brands like Huawei are closing the gap. Rather than building its own system, the company is working in close partnership with Android's creator's, Google.
Nummela said he believed his team's extensive industry relationships with carriers and retailers, powered by the Nokia brand, could help them quickly capture smartphone share by convincing entry-level buyers of its feature phones to upgrade in markets like India, Indonesia, and Russia. "We really see the opportunity to create some space for ourselves on the (store) shelves," Nummela said. "Consumers may be carrying different smartphones now, but are they really in love and loyalty to those brands?" Nummela is a long-time Nokia sales and product development executive, who moved to Microsoft when the phone business was sold.
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HMD President Florian Seiche is a phone industry veteran who beforehand worked at Siemens, Orange, HTC and Nokia. Head Marketing Officer Pekka Rantala is a previous CEO of Angry Birds game maker Rovio, and also a Nokia veteran. "We are not going to skip any markets, in the long term,"Seiche said of its global game-plan, adding that HMD has already set up offices in 40 locations around the world.
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