Nokia’s potential return to the smartphone space came into the spotlight at its Capital Markets Day today, with company presentations suggesting it may licence its brand to third-parties from late in 2016.
While Microsoft has a deal in place to use the Nokia brand on feature phones over a ten-year period, the same is not the case for all handsets. And Microsoft is already moving away from the Nokia name on its smartphones, having introduced its first “Microsoft Lumia” products this week.
According to information presented at the Finnish vendor’s Capital Markets Day, Nokia can licence its name to other handset makers from the fourth quarter of 2016, under the terms of the agreement signed when it sold its Devices & Services unit to Microsoft. And Nokia can already licence its brand for other consumer electronic devices, although it is not clear if it has ambitions in this regard.
Although the company could look to create its own devices unit again, this does not appear to be on the cards. Instead it is likely to work with device manufacturers such as Compal or Foxconn, which already have the capabilities to deliver products to market, but lack brand presence.
The presentation indicated that Nokia is likely to retain some input into the design of new products using its name. This would appear to mean it could follow a similar path to BlackBerry and Foxconn with the Z3, rather than being a fully hands-off licencing business.
Nokia’s brand licensing efforts form part of its Technologies unit – one of three divisions it now has, alongside its infrastructure unit and Here location business.
Its presentation noted capabilities in areas such as “design” and “quality assurance and quality control”. It also holds a significant amount of intellectual property in the mobile device space, which may make it an appealing partner.
Observers are looking for any indication that new devices wearing the Nokia badge may make it to the market in future, due to the company’s incredible heritage in this space – it has gone from having an almost 40 per cent market share to zero in the course of ten years.
In future, Nokia smartphones powered by Android and created by a third-party could end up competing with Microsoft Lumia devices which follow a path originally defined by Nokia, but not for two more years – which is a long time in the smartphone game.
IHS analyst Ian Fogg certainly believes Nokia would have its work cut out to return to the handset game. “They should be more ambitious,” he tweeted. “New Nokia-brand smartphones must aim to be far better than past Nokia-built devices, given recent failures.”