Last year, Nokia sold its smarphone division to Microsoft for $9.5 billion. The intent, on the part of Microsoft, was to acquire a fully-functional smartphone manufacturing division to begin pushing adoption of the Windows Phone, using both the Nokia and Microsoft brands. As most are probably aware, that didn’t work out so well for Microsoft, as the Inquisitr continues to report. Earlier this month, Microsoft slashed 7,800 former Nokia jobs, a restructuring that will mean a one-time $7.6 billion writedown for Microsoft.
Now, Nokia has confirmed rumors that it intends to reenter the smartphone market, according to a report from the International Business Times; albeit with a new partner, licensing devices rather than manufacturing them.
As Nokia spokesperson Robert Morlino explained in a blog post, Nokia intends to return to the mobile arena by licensing their brand to other designers and producers.
“The right path back to mobile phones for Nokia is through a brand-licensing model. That means identifying a partner that can be responsible for all of the manufacturing, sales, marketing and customer support for a product.”
As The Motley Fool notes, Nokia is aware that it is unable to return in the same capacity it once had to manufacture devices without its “manufacturing, marketing, and channel distribution capabilities,” but that they still hold themselves to be a good designer with a good brand. Nokia would still design the products and earn the royalties, but everything else would be up to whomever they partner with.
The move makes sense in a lot of ways. Established manufacturers are struggling to compete with industry giants Apple and Samsung; Microsoft is already pretty much out of the market, and HTC is coming close; their global market share is estimated to be only 2 percent in spite of their status as one of the top three players in North America. If HTC’s established presence and brand isn’t enough to pull them out of the fire, Nokia certainly won’t be recouping the massive investment required to start manufacturing smartphones again – but they still want a piece of that pie, and they don’t want people forgetting Nokia’s history in the mobile device industry.
That being said, Nokia has no plans to return to the mobile market before Q4 2016. By then, the landscape will likely have changed a great deal; nearly a year an a half is a lifetime and a bit in smartphone cycles, and everything could change significantly.
Nokia fans may not exactly have reason to rejoice at this point, but this is certainly still good news in a market becoming starved for competition.
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