Finnish telecommunication giant, Nokia [NASDAQ:NOK] is planning to make a comeback to the mobile consumer market. Nokia sold off its consumer mobile business to Microsoft in 2013. Nokia Technologies Ltd. the arm still with Nokia Inc. is planning for new products in mobility business.
Nokia was at a time the dominant player in the consumer mobile market. It accounts for over 60% of all handset sales just six years back. It was crushed by Chinese players in the low cost business and by Apple & Google in the Smartphone business. It was not able to foresee the demand for feature rich smartphone from the market.
As per agreement with Microsoft, Nokia is prohibited to launch any new smartphone under their brand by second quarter of 2016. But the agreement doesn’t stop it from licensing the technology to other manufacturers.
As Nokia has sold off its manufacturing plants to Microsoft, it may plan to return to the market by licensing to the other manufacturers instead of direct manufacturing. It also makes business sense for them not to enter highly competitive consumer mobile manufacturing.
Nokia Technologies is the patent arm of Nokia and it licenses more than 10,000 patents to various manufacturers. Nokia Technologies is planning to release new smartphones under Nokia brand names by the end of 2016. The unit is also planning to release other products such as Virtual reality technology. They are scaling operations by ramping up hiring in recent times. They have also released new N1 tablets and Android Z launcher in China which are being manufactured by Foxconn.
As per Richard Charris, a former Nokia executive, “The people will be blown away if some of the products which are under development came out in market”.
The difference in R&D and market ready products is huge. Nokia may not make any sudden move to enter the consumer market directly. Recently its CEO Rajeev Suri has cleared that Nokia may not return to consumer market directly but he has not ruled out the brand to return to Consumer world.