HMD Global, a newly-founded Finnish company says it will invest $500 million over the next three years on the global marketing of Nokia brand of mobile phones and tablets.
This is coming amid Nokia’s Corporation’s signing a strategic brand and intellectual property licensing agreement with HMD Global to create new generation of Nokia-branded mobile phones and tablets.
To complete its portfolio of Nokia branding rights, HMD has conditionally agreed to acquire from Microsoft the rights to use the “Nokia” trademark on feature phones until 2024, and design rights relating to Microsoft’s Feature Phone Business.
Under the strategic agreement covering branding rights and intellectual property licensing, Nokia Technologies will grant HMD Global an exclusive global licence to create Nokia-branded mobile phones and tablets for the next ten years.
According to the companies, the transaction is expected to close in second half of 2016. Together, these agreements will make HMD the sole global licensee for all types of Nokia-branded mobile phones and tablets.
The remainder of Microsoft’s feature phone business assets, including its Hanoi manufacturing facility, and global distribution, fulfillment and supply chain networks, will conditionally be acquired by FIH Mobile Limited, a subsidiary of Hon Hai Precision Industries trading as Foxconn Technology Group.
Furthermore, HMD has signed an agreement with FIH and Nokia Technologies to establish, on closing of the Microsoft transactions, a collaboration framework to support the building of a global business for Nokia-branded mobile phones and tablets.
This agreement according HMD will give the company full operational control over sales, marketing and distribution of its Nokia-branded devices, with exclusive access to the pre-eminent global sales and distribution network to be acquired by FIH from Microsoft, as well as access to FIH’s world-leading device manufacturing and engineering capabilities, and its growing suite of proprietary mobile technologies and components.
Under the agreement, Nokia Technologies will receive royalty payments from HMD for sales of Nokia-branded mobile products, covering both brand and intellectual property rights.
HMD, says it intends to leverage and grow Nokia’s global brand reach, delivering beautifully designed, high quality products to people all over the world in line with Nokia’s brand promise.
Commenting on the deal, Arto Nummela, CEO of HMD global, says that “we will be completely focused on creating a unified range of Nokia-branded mobile phones and tablets, which we know will resonate with consumers. Branding has become a critical differentiator in mobile phones, which is why our business model is centered on the unique asset of the Nokia brand, and our extensive experience in sales and marketing. We will work with world class manufacturing and distribution providers to move quickly and deliver what customers want.”
Also speaking, Ramzi Haidamus, president of Nokia Technologies, said: “today marks the beginning of an exciting new chapter for the Nokia brand in an industry where Nokia remains a truly iconic name. Instead of Nokia returning to manufacturing mobile phones itself, HMD plans to produce mobile phones and tablets that can leverage and grow the value of the Nokia brand in global markets. Working with HMD and FIH will let us participate in one of the largest consumer electronics markets in the world while staying true to our licensing business model.”
Vincent Tong, Chairman of FIH, said, “We are looking forward to fostering a strong and long-term collaboration with HMD global and Nokia. We are impressed by the experience and expertise of the HMD management team and are committed to supporting them with our manufacturing, technology and supply chain capabilities, to capture market opportunities together in the future.”
HMD plans for its future Nokia-branded smartphones and tablets to run on the Android operating system, uniting one of the world’s iconic mobile brands with the leading mobile software and app development community.
Subject to receipt of all necessary regulatory approvals the transaction between HMD and Microsoft is anticipated to close in the second half of 2016, the companies said.
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