Microsoft has announced an agreement to sell its feature-
phone business to FIH Mobile, a subsidiary of Taiwan-based
electronics giant Foxconn, along with another entity, called
“HMD Global, Oy,” for about $350 million. The transaction is
expected to close in the second half of 2016.
Once the deal is complete, around 4,500 employees will “have
the opportunity” to join FIH Mobile, or HMD Global. HMD
Global was founded out of Finland in 2015, and it initially
looked like it was a business vehicle of sorts set up to help
facilitate the Microsoft transaction. Finland, if you remember,
is home to Nokia, the tech titan that sold its mobile phone
business to Microsoft two years back. But this is where things
start to get really interesting, because Nokia has now
confirmed that it plans to reenter the mobile phone and tablet
realm globally through a “strategic agreement covering
branding rights and intellectual property licensing.”
“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. “Instead of Nokia returning to manufacturing
mobile phones itself, HMD plans to produce mobile phones
and tablets that can leverage and grow the value of the Nokia
brand in global markets. Working with HMD and FIH will let us
participate in one of the largest consumer electronics markets
in the world while staying true to our licensing business
model.”
Once a major consumer brand, Nokia has been in an odd
place since selling its mobile phone business to Microsoft, as
well as offloading its Here mapping unit, but it has continued
behind the scenes with its network infrastructure business,
Nokia Networks, and Nokia Technologies, a wing that aims to
keep the brand alive in the public realm. Nokia Technologies
had been fairly quiet until recently, but it now has its virtual
reality (VR) Ozo camera and the digital health-tracking
company Withings, which it recently acquired for $192 million .
However, Nokia is a mobile phone company at heart, and it
has previously indicated that any return to making phones
would likely be through a brand-licensing agreement . This is
because it no longer has many of the manufacturing and
distribution capabilities needed to make and ship phones — it
gave all that up when Microsoft came a-callin’. So while Nokia
still harbors ambitions to be a big mobile brand, it will have to
rely on others much more than it once did. You may
remember that the company launched an Android-powered
tablet in China back in 2014 , which was under a similar
arrangement as it will be using now as it moves forward.
This is where HMD Global comes into play — it’s a new private
company seemingly founded under Nokia’s volition to build a
new wave of mobile devices, replete with the Nokia brand. The
venture is actually being run by CEO Arto Nummela, formerly
of Nokia and the head of Microsoft’s Mobile Devices business
in Greater Asia, Middle East, and Africa, as well
as of Microsoft’s soon-to-be-sold feature phones business.
Nummela will be aided by President Florian Seiche, who
currently serves as senior vice president for Europe sales and
marketing at Microsoft Mobile.
We don’t yet know what these devices will look like, but we do
know that HMD plans to invest around $500 million over the
next three years to “support” the marketing of Nokia-branded
devices, which HMD says will be “funded via its investors and
profits from the acquired feature phone business.” Nokia also
says that it will acquire the rights from Microsoft to use the
“Nokia” trademark on feature phones until 2024.
0 comments:
Post a Comment