Nokia Plans To Re-enter Mobile Phone Business

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Nokia Plans To Re-enter Mobile Phone Business
<a href="https://pixabay.com/users/Hermann/">Hermann</a> / Pixabay

Nokia is planning to re-enter the mobile phone business in 2016 when it is already free from its agreement with Microsoft, according to the company’s CEO Rajeev Suri.

During an interview with Manager Magazin, Suri said Nokia will go back into designing and licensing mobile phones. According to him, Nokia will “look for suitable partners.” He added, “Microsoft makes mobile phones. We would simply design them and then make the brand name available to license.”

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Microsoft suffered huge losses related to Nokia devices acquisition

Nokia sold its mobile phone business to Microsoft last year for $7.2 billion The Finnish company’s manufacturing facilities in India, and South Korea was not included in the deal. Nokia agreed to license its patents to Microsoft and to stay away from the mobile phone business until 2016.

Last April, Microsoft indicated in a regulatory filing that it may record a big write-off related to its acquisition of Nokia’s mobile business. The software giant reported that its Phone Hardware unit, which is primarily composed of the assets from Nokia suffered huge losses. Microsoft’s devices only account 3% of the smartphone market.

“Given its recent performance, the Phone Hardware reporting unit is at an elevated risk of impairment,” according to Microsoft.

The software giant recently announced that Stephen Elop, who returned to Microsoft from Nokia, agreed to retire from his position.

Nokia stock rises on patent licensing deal with LG

The shares of Nokia were trading higher today driven by the report that it entered a patent licensing agreement with LG Electronics. The deal enables the Finnish company to remain a major player in the mobile phone industry.

The stock price of Nokia climbed 2.32% to $7.28 per share at the time if this writing around 1:43 in the afternoon in New York.

Under the agreement, LG will integrate the technologies developed by Nokia into its smartphones. LG is among 60 licensees for Nokia’s mobile technologies including 2G, 3G, and 4G communication.

“We are pleased to welcome LG Electronics to our licensing program…We’ve worked constructively with LG Electronics and agreed on a mutually beneficial approach, including the use of independent arbitration, to resolve any differences. This agreement sets the stage for further collaboration between our companies in future,” Ramzi Haidamus, President of Nokia Technologies.

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