Nokia Explores two paths back to the smartphone market

Nokia logoNokia new CEO Rajeev Suri has big plans for his company's future in the smartphone space, as many suspected.

At "Nokia Capital Markets Day 2014" he spoke to analysts and investors vowing a return to the smartphone "consumer world". But the veteran phonemaker's gameplan this time around will be decidely different from its previous run, which wrapped up in April with the completion of $7.2B USD sale of Nokia Devices to Microsoft.

The Finnish phonemaker was one of just a handful of firms that created that the smartphone phase a decade ago, taking global markets by sorm with its "multimedia" phones and "internet tablets" (which pioneered the large smartphone niche). It designed hardware and software, and even manufactured its own devices, and was known for pushing the envelope of what a phone could do. By the time the term "smartphone" entered the global awareness, Nokia Devices was already the market's largest player.

But the momentum for Nokia's Symbian platform stuttered amidst the emergence of Apple and Google Android OS. Fearing it was on a "burning platform", Nokia Devices signed an exclusivity deal with Microsoft's new Windows Phone platform, but that only hastened Nokia's tailspin. What ensued was a painful and protracted decline. Apple and Samsung had both passed Nokia in smartphone sales by mid 2011.

In the wake of Nokia Devices' downsizing and sale, a reinvigorated Nokia is looking impressive again, sporting a strong telecommunications business. Of course much of what Nokia's CEO chose to focus on was the present -- smartphone patent licensing and developing strong mobile services.

But Nokia's chief was surprisingly open at dropping two potential routes that his company may take in its return to the smatphone market. In one slide he suggested that Nokia may license its brand name to other OEMs after the exclusivity period with Microsoft requires in Q4 2016.

While Microsoft has been pretty quick to abandon the Nokia brand name in its smartphone lineup, other companies in Asia may be interested in leveraging Nokia's familiar name to enter North American and European markets. Nokia cites analyst estimates which quote its brand value at EUR?3.2B ($4.0B USD).

In another slide the CEO confirmed that Nokia is also exploring "ODM Management" (ODM = original design manufacturer). In other words it may tap ODMs like Compal Electronics or Foxconn to design and manufacturer smartphones, which Nokia will then place its brand and software on, and sell to customers worldwide. If there was one take home message from all of us, it's that we can expect the Nokia name -- gone for now from Microsoft devices -- to reappear on phones sometime in late 2016 or early 2017.

Source: DailyTech

Tags: Nokia, smartphones

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