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Thread: Nokia CEO: We'll get back into phones

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    Nokia CEO: We'll get back into phones

    Nokia CEO says to get back into phones
    Reuters, June 18

    Nokia, once the world's biggest maker of mobile phones, plans to start designing and licensing handsets again once an agreement with partner Microsoft allows it to in 2016, its chief executive told Germany's Manager Magazin.
    Nokia, once the world's biggest maker of mobile phones, plans to start designing and licensing handsets again once an agreement with partner Microsoft allows it to in 2016, its chief executive told Germany's Manager Magazin.

    "We will look for suitable partners," Rajeev Suri said in an interview published on Thursday. "Microsoft makes mobile phones. We would simply design them and then make the brand name available to license."

    Finland's Nokia sold its phone business to Microsoft in 2014 after years of declining sales as it failed to keep up with innovations led by Apple's iPhone.

    But months later it launched a new brand-licensed tablet computer, produced under license by Taiwanese contract manufacturer Foxconn, with an intention to follow up with more devices.

    Many analysts expect Microsoft to write off all or part of the $7.2 billion it paid for Nokia's handset unit, a deal that left Microsoft with a money-losing business and only 3 percent of the smartphone market.

    Microsoft manager Stephen Elop, whom the U.S. software giant installed as Nokia chief executive for a time, is now leaving Microsoft in a sign the company is turning away from the hardware devices business he headed and back to its core software business.

    Nokia in April announced a 15.6 billion-euro ($17.8 billion) takeover of Alcatel-Lucent in a bid to boost the network equipment business that is now its mainstay.

    It is also hiving off its mapping business, which has drawn interest from German premium carmakers BMW, Audi and Mercedes, as well as Silicon Valley and Chinese Internet and technology businesses.

    Upon being asked whether there were any preferred bidders for the HERE high-definition maps business, Suri told the magazine, "Anybody who can improve the business in the long run is a good buyer."

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    Nokia comments on media speculation about mobile devices
    Nokia, July 13

    The following has been posted by Robert Morlino, spokesman for Nokia Technologies

    For 14 years Nokia was the biggest cell phone maker in the world, and the brand became a household name -- one that evoked quality, innovation and human connection. The brand is still recognized that way by millions of people around the world, which is incredibly gratifying and a huge compliment for the people who helped create it. So it’s not surprising that today, the question comes up all the time: will Nokia return to mobile devices?

    The answer is: it’s complicated.

    Let’s take it from the top. As you probably know, we sold essentially all of our Devices & Services business to Microsoft in April 2014. With it went all of the enormous manufacturing, marketing and channel distribution capabilities you need to be in the business of making & selling phones.

    The Nokia that exists today remains focused on the connected world, through mobile network infrastructure, location & mapping services, and technology development & licensing. We also aim to continue bringing our iconic design capabilities and technology innovation to the mobile space, and in the form of amazing products people can someday hold in their hands. However, we’ll do it in a completely different way from before.

    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.

    If and when we find a world-class partner who can take on those responsibilities, we would work closely with them to guide the design and technology differentiation, as we did with the Nokia N1 Android tablet. That’s the only way the bar would be met for a mobile device we’d be proud to have bear the Nokia brand, and that people will love to buy.

    To summarize, we will look for the right partner who can take on the heavy lifting and work closely with us to deliver a great product. As we agreed with Microsoft, the soonest that could happen is Q4 2016 -- so it’s safe to say Nokia won’t be back (at least in phone form...) before then.

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    The Nokia brand doesn't have the juice it once enjoyed. Their spectacular implosion with Symbian, along with the rise of Samsung and Apple in mobile, has killed it. A few of us oldsters still remember Nokia quality but kids these days simply don't care. They don't care about security either, or else BlackBerry would still be a titan. They care about apps and design.

    Nokia can make some nice coin, safely, by licensing their IP. I don't think their brand name is worth anything anymore in mobile though, and spending money on design is a mistake in a world so dominated by "the big two" - Apple and Samsung.

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    Back to the future: Nokia prepares for mobile comeback
    Reuters, August 10

    By Eric Auchard, Jussi Rosendahl and Leila Abboud

    FRANKFURT/HELSINKI (Reuters) - Nokia NOK1V.HE is hiring software experts, testing new products and seeking sales partners as it plots its return to the mobile phone and consumer tech arena it abandoned with the sale of its handset business.

    Once the world's biggest maker of mobile phones, the Finnish firm was wrongfooted by the rise of smartphones and eclipsed by Apple AAPL.O and Samsung 005930.KS. It sold its handset business to Microsoft MSFT.O in late 2013 and has since focused squarely on making telecoms network equipment.

    Now Nokia boss Rajeev Suri is planning a comeback. He must wait until late 2016 before he can consider re-entering the handset business - after a non-compete deal with Microsoft expires - but preparations are underway.

    The company has already dipped its toe into the consumer market; it has launched an Android tablet, the N1, which went on sale in January in China and days ago unveiled a "virtual-reality camera" - heralding it as the "rebirth of Nokia".

    It has also launched an Android app called Z Launcher, which organizes content on smartphones.

    Meanwhile its technologies division has advertised on LinkedIn dozens of jobs in California, many in product development, including Android engineers specializing in the operating software Nokia mobile devices will use.

    Nokia had also planned to lay off about 70 people at the division, according to a May announcement, but a company source told Reuters that the figure had since been halved.

    PATENT TROVE

    Nokia itself is not giving much away about its preparations, beyond saying some staff at the 600-strong technologies division are working on designs for new consumer products, including phones, as well as in digital video and health.

    But it will not be easy to claw its way back to relevance in the fast-changing, competitive mobile business where Apple AAPL.O has been scooping up nearly 90 percent of industry profits, nor for it to carve out a place in electronics.

    One ace Nokia that holds is ownership of one of the mobile industry's biggest troves of intellectual property, including patents it retained after selling its handset business. It does not want to waste such resources, built up with tens of billions of euros of investment over the past two decades.

    It will also get an injection of talent when it completes the 15.6-billion-euro ($17 billion) acquisition of Alcatel-Lucent, announced in April, in the form of Bell Labs - a U.S. research center whose scientists have won eight Nobel prizes.

    It says it will not repeat the mistakes of the past of missing technology trends, being saddled with high costs, and reacting too slowly to changing consumer tastes.

    To blunt such risks, it is seeking partners for "brand-licensing" deals whereby Nokia will design new phones, bearing its brand, but - in exchange for royalties - will then allow other firms to mass-manufacture, market and sell the devices.

    This is stark contrast to its previous handset business which in its heyday manufactured more phones than any other company in the world and employed tens of thousands.

    Suri said last month that Nokia aimed to re-enter the mobile phone business, but only through such licensing agreements. It will not fall back on the "traditional" methods, said the CEO, who took the helm last May and has turned it into a slimmed down, more profitable company. He sold off its mapping business a week ago.

    Such brand-licensing deals - as Nokia has struck for the N1 tablet - are less profitable than manufacturing and selling its own products, but also less risky. They can add a tidy sum of revenue for little investment for the company, which generates the bulk of income from selling telecoms network equipment to operators like Vodafone and T-Mobile.

    "They want to be innovative and seen as a company with long-term vision in the (tech) industry and having a foot in devices plays into this impression, even if it's not bringing massive revenue at the outset," said Gartner analyst Sylvain Fabre.

    NEWCOMERS

    Brand-licensing models are not new in the industry; European companies like Philips PHG.AS and Alcatel have made money from consumer electronics by licensing out their brand after capitulating to Asian competitors more than a decade ago.

    But given the crop of newcomers like China's Xiaomi and India's Micromax, it may not be possible for Nokia to reproduce even the minor successes that Philips and Alcatel were able to achieve by renting out their brand.

    With advances in contract manufacturing and standardization of software, components and features like touch-screens, it is also easier than ever for companies to outsource everything to produce lookalike phones.

    "We only see this competitive pressure intensifying in coming years," said CCS Insight mobile analyst Ben Wood. "Barriers to entry in the handset market are lower than ever and almost anyone can enter the smartphone market.

    The strength of the Nokia brand - crucial to the success of such licensing deals - is also open to debate.

    The company says its brand is recognized by four billion people. But, after being consistently ranked as one of the world's top-five brands in the decade up to 2009 according to market researcher Interbrand, it has since nose-dived and now looks set to disappear from top 100 lists.

    "A brand is quickly forgotten if it is absent from the consumer business," said former Nokia executive Anssi Vanjoki, a professor at Finland's Lappeenranta University of Technology.

    "The brand will not help much if the product is similar to what is already being sold out there. But if there is something new and interesting to it, the old heritage may be helpful."

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