The Return of Nokia to Mobile Phones in 2016

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The former poster child of mobile phone companies, Nokia, is reported to be considering a return to the business of mobile phones. However, Nokia is currently restricted from using its brand name on phones until the fourth quarter of 2016, as part of its deal with Microsoft (where it sold its device manufacturing arm to the software giant).

On the topic of Microsoft now manufacturing the phones, Rajeev Suri, Nokia’s CEO was quoted as saying “we would simply design them and make the brand name available to license”. This would see Nokia design all of the hardware and license it out rather than building the phones itself. This strategy is not unfamiliar to Nokia – it’s exactly what they did with their N1 tablets.

Industry reports suggest that Nokia will stick with the Android operating system for its mobile devices, as it’s too late to design their own, and the N1 tablets are Android-based.

These latest developments come off the back of an executive shuffle at Microsoft, which saw Stephen Elop, Nokia’s former CEO, moving on from Microsoft. Elop was absorbed by Microsoft as part of the acquisition and was heading up Microsoft’s devices division. Insider reports suggest that Microsoft is also reshuffling its product lines, with Nokia elements being removed and its devices division moving into its Windows division.

When Nokia is free to re-enter the mobile phone market, after the expiration of the restrictions from the Microsoft deal, experts are tipping a return to form, as Nokia will be doing what it does best – designing mobile devices.

However, Nokia’s return is not going to be easy. It will be competing in a very crowded space, with HTC, Samsung and China’s Xiaomi all part of Google’s mobile operating system economy. The large budgets of these companies and their ability to compete on price should be of concern to Nokia.

However, the Nokia brand still has plenty of weight, especially in European markets, and this new licensing-based model could suit the company better (particularly in its new, smaller form since the sale of its device manufacturing capability).

2016 will be the true test for the Finnish phone company and the technology sector and mobile phone enthusiasts will be waiting to see the first iteration of Nokia’s new foray into the space it once dominated.

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