Tuesday, 14 July 2015

Nokia will again re-enter Mobile Phone Market in 2016

After CEO Rajiv Suri hinted at Nokia’s plans to re-enter the smartphone market, the company has finally provided some official clarity on whether it will re-enter the smartphone market or not in the future. After giving up its entire mobile handset business to Microsoft, the company will consider coming back to the smartphone industry next year through the same brand-licensing manner as it did with its N1 tablet.

The company does not plan to do anything before the fourth quarter of 2016, as the contract with Microsoft does not allow them to do so. However, post that, the company will go hunting for a partner who would take care of everything from manufacturing, sales, marketing and customer support as well. Nokia would do is give its brand name to the smartphone and will also give inputs in design and market differentiation.

“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,” said Robert Morlino, a spokesman for Nokia Technologies.

Using this formula, Nokia earlier launched the Android-powered tablet called the N1. It designed the tablet, but licensed a Chinese company to manufacture the tablet, use its brand name and sell it in China. The company is set to follow the same principle for its smartphone business as well.

This is in line with what CEO Rajiv Suri had said last month. He also reiterated the adoption of the same brand-licensing model. “We will look for suitable partners,” Suri had said. “Microsoft makes mobile phones. We would simply design them and then make the brand name available to license.”

After the mobile handset acquisition, Microsoft has also been in damage control mode, and recently laid off 7,800 people, primarily from the company’s mobile division. Even former Nokia head Stephen Elop was let go last month. Microsoft had also announced a huge round of layoff last year, which saw around 18,000 employees leave. Of this, the majority were Nokia employees who moved after the acquisition by Microsoft.