Feature Article

April 21, 2015

2016 Could Mark Nokia's Return to the Phone Market

About a year ago, I commented that if we were to look at everything that has been going on to date with Nokia, we see a pattern. The company was focusing on providing network solutions, rather than mobile phones as its future strategy. All indications were that this seemed to be the right move for Nokia. The company made big profits in the second quarter of 2014 after it sold its mobile devices unit to Microsoft.

Over the past couple of years, Nokia has been doing a lot of shopping. In 2013, Nokia acquired earthmine, Inc., which uses vehicle mounted camera rigs to capture imagery and three dimensional data of the urban environment. It also picked up Scalado which is a provider of imaging technologies, application and engineering services for the camera (phone) industry.

The assumption was that Nokia was reliving itself from the handset industry and focusing in other directions. However, according to Re/code, “Nokia is quietly plotting a return to the consumer mobile market.” In February 2014 there was talk that Nokia engineers had been developing an Android phone, even though they were in talks to be acquired by Microsoft.

Part of the deal with Microsoft was that Nokia could not sell any phone under the Nokia brand through the end of 2015. This has kept talks about Nokia re-entering the world of mobile phones on the side of rumors. New devices would not be available from Nokia until sometime in 2016 and will be driven by the smallest of the three businesses that remained after the Microsoft deal, Nokia Technologies.

Another outcome of Nokia’s deal with Microsoft is that it now owns Nokia’s manufacturing operations. This does not appear to be an issue for Nokia Technologies as it has recently released two products, one is an Android program called Zlauncher and the other is the N1, which is an Android tablet design that Nokia Technologies licensed to another manufacturer but will be sold under the Nokia name in China.

Rather than open new manufacturing plants, this appears to be direction that Nokia will be heading. The company owns a great many number of patents that reach the 10,000 mark. This gives Nokia the opportunity to design and develop a lot of interesting products and license them, along with the Nokia brand. In addition, these companies would also be responsible for sales and distribution.

It will be interesting to see just how much control Nokia will have with its non-involvement with sales and distribution. Another interesting thing to keep an eye on is the actual direction that Nokia will take as it re-establishes itself. I mentioned its acquisitions over the past few years, and the company did promise that it would be “expanding into exciting new areas … with a focus on enabling the human possibilities of the connected world.” We will just have to wait a little longer to see where this all leads to for Nokia.


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