ESPOO, FINLAND – Nokia has signed a strategic brand and intellectual property licensing agreement enabling HMD Global Oy (HMD) to create new generation of Nokia-branded mobile phones and tablets for the next ten years.
HMD, a newly founded company based in Finland, also announced that it has conditionally agreed to acquire from Microsoft the rights to use the Nokia brand on feature phones, and certain related design rights, making it the sole global licensee for all types of Nokia-branded mobile phones and tablets. Its new smartphone and tablet portfolio will be based on Android.
HMD and Nokia Technologies have signed an agreement with FIH Mobile Limited (FIH), a subsidiary of Hon Hai Precision Industries (trading as Foxconn Technology Group), to establish a collaboration framework to support the building of a global business for Nokia-branded mobile phones and tablets
The company also said that it will invest over US$500 million over the next three years to support the global marketing of Nokia-branded devices. Nokia will provide HMD with branding rights and cellular standard essential patent licenses in return for royalty payments, but will not be making a financial investment or holding equity in HMD.
“Today marks the beginning of an exciting new chapter for the Nokia brand in an industry where Nokia remains a truly iconic name”, said Nokia Technologies president Ramzi Haidamus, in Wednesday’s news release. “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 the Microsoft transaction closes, HMD will be led by Arto Nummela as CEO, who previously held senior positions at Nokia and is currently the head of Microsoft's Mobile Devices business for Greater Asia, Middle East and Africa, as well as Microsoft's global Feature Phones business.
“We will be completely focused on creating a unified range of Nokia-branded mobile phones and tablets, which we know will resonate with consumers”, Nummela said. “Branding has become a critical differentiator in mobile phones, which is why our business model is centered on the unique asset of the Nokia brand and our extensive experience in sales and marketing. We will work with world class providers in manufacturing and distribution to move quickly and deliver what customers want."
