After exiting the smartphone market dramatically by selling its mobile making division to Microsoft for $7.2 billion back in 2013, Nokia has hinted it is looking to return to the phone business by a different route — taking advantage of a clause in its sale agreement that allows it to use the Nokia brand on handsets again starting from this year.
The company has a history of radical reinventions. But returning to a market where it excelled for so long is something it views as an “opportunity” given the residual brand recognition of Nokia and handsets, CEO Rajeev Suri said today. He was speaking at a Nokia press and analyst briefing in Barcelona this evening, ahead of the Mobile World Congress trade show which kicks off tomorrow.
Last summer Suri told a German magazine Nokia intends to find a licensing partner to design and build phones this year. He rowed back from that line slightly today, saying the company is in no hurry to get its brand name back on handsets. “It might happen in 2016 or it might be 2017,” he said.
But he also spoke at length about the opportunity Nokia sees to license its brand name to the “right partner” for phones. Asked by TechCrunch how its search for a suitable partner to create Nokia-branded smartphones is going, and when we might expect to see the Nokia brand back on handsets, Suri said: “There’s no specific timeframe. We don’t need to be in a rush. We will explore this with the right partner or partners, depending on the case.”
“We think it’s a good business model because the Nokia brand has great retention – the recognition of the brand is still very high in all the major markets. We also think that if there will be a product with the Nokia brand on it there’s an opportunity for premium on that product – clear price premium,” he added, suggesting that any future Nokia-branded handsets will be going head-to-head with Apple’s iPhone and Android flagships from the likes of Samsung (which unboxed its latest pair of premium flagships just this evening).
“For us the business model is one of no traditional manufacturing, no channel or nothing we are just basically licensing our brand, the partner will have to pay us an IP license for it and royalty on the brand use, and we want to be in a position to design the devices in question with appropriate control measures should the partner not work to our standard,” Suri added. “All that’s in play. This takes time. We need to find the right partner.”
Would Nokia consider working with Foxconn as a partner for phones? The Chinese manufacturer has been its licensing partner for the N1 tablet, which it announced in November 2014, and which runs the Android OS skinned with Nokia’s Z launcher. “I don’t know,” said Suri in response to the direct question.
The right partner would need the right “design wherewithal, channel, funding to go global”, he added. “There’s no timeline, there’s no rush. Could happen in 2016, could happen later. But I think for us it’s a great business opportunity because ultimately royalty-based businesses are like software-based businesses, they all fall onto the bottom line.”