Recalling its heyday two decades ago as one of the world’s top producers of mobile phones, Nokia of Finland positioned itself for a potential (albeit indirect) return to the wireless device market with an agreement Wednesday to grant HMD Global, a newly-formed Finnish company, “an exclusive global license to create Nokia-branded phones and tablets for the next ten years.”  Providing further momentum to that deal, HMD also joined forces with Chinese manufacturer Foxconn on a separate, but related pact to acquire from Microsoft the former Nokia “feature phone” business which Nokia had sold in 2013. 

Led by former executives of Nokia, HMD said it would invest US$500 million over the next three years “to support the global marketing of Nokia-branded mobile phones and tablets, funded via its investors and profits from the acquired feature phone business.”  Foxconn will manufacture devices to be designed by HMD, while Nokia—now a key player in the global market for telecommunications network gear—will receive a per-device licensing fee. 

As Nokia Technologies President Ramzi Haidamus asserted “working with HMD and [Foxconn] will let us participate in one of the largest consumer electronics markets in the world while staying true to our licensing business model,” Arto Nummela, the CEO-designate of HMD, explained that “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.”  Observers anticipate that the deal will be completed by the end of the year.