Nokia is all set to make a comeback in the smartphone business in the first half of 2017 with an Android device. The Finnish company has signed a 10-year licensing agreement with a new venture called HMD Global to sell Nokia-branded phones. The company’s feature phones are still popular in many parts of the world. HMD Global will now sell those feature phones along with smartphones and tablets.
Will brand Nokia shine this time?
Nokia today largely makes telecom networking equipment. Under the agreement, Nokia will license its brand and key cellular patents to HMD Global. In turn, HMD will pay it a royalty on the sale of every Nokia-branded device. It’s worth pointing out that Nokia has made no investments in HMD Global. The company said in a statement that its leading position in feature phones market will give HMD a strong foothold in the Americas, Europe, Asia and Africa.
HMD has several advantages over other smartphone startups. It has an experienced management, Nokia’s strong global brand, and Foxconn has a manufacturing partner. However, the road ahead won’t be easy in the crowded smartphone market where dozens of Android vendors are engaged in a cut-throat competition. CCS Insight analyst Ben Wood said the barriers to entry for Android smartphones are low. HMD has to drive scale in order to succeed.
Seth Klarman: Don’t Underestimate The Power Of Uncertainty
Since founding his investment partnership in 1983, Seth Klarman has offered a stream of wise and timeless commentary on markets and the craft of investing. His commentary from periods of market volatility is incredibly insightful. Klarman's letters to clients around the time of the dot-com bubble and financial crisis in 2008/09 contained timeless insights on Read More
Foxconn to make devices for HMD
HMD Global said it would rely on Foxconn to manufacture all its Nokia-branded devices. HMD CEO Anto Nummela told Reuters that his team’s extensive relationships with wireless carriers and retailers, coupled with a strong brand, would help the company capture market share by convincing feature phone owners to upgrade in key markets like India, Indonesia, and Russia.
HMD President Florian Seiche said the company was not going to skip any market in the long-term. It has already set up offices in 40 locations around the world. The Finnish company had sold its smartphone business to Microsoft in 2014. But Microsoft’s Lumia phones have failed miserably. It could challenge neither Android nor Apple’s iOS.
HMD’s Android smartphone to be unveiled at MWC
The first Nokia-branded Android smartphone is likely to be unveiled at the Mobile World Congress in February 2017 in Barcelona. HMD has already confirmed its presence at the MWC. Nokia has also confirmed that its CEO Rajeev Suri will be speaking at the MWC 2017. The Android phone, rumored to be called D1C, will be available in two variants.
The high-end variant is said to feature a 5.5-inch display with 1080p resolution, a Qualcomm Snapdragon 430 processor, 3GB RAM, 16GB of built-in storage, 16MP main camera, and 8-megapixel front snapper. The second version is expected to have a 5-inch display, 2GB RAM, the same chipset and front camera, and 13MP main camera. Only time will tell whether these phones can beat hundreds of other Android phones that are released every month.