Microsoft said it will remain present in the smartphone market, selling its own Lumia devices and licensing Windows 10 Mobile to other manufacturers. The announcement comes ahead of the expiry later this year of its exclusivity on the Nokia brand, agreed when it bought the Nokia phone business in 2014. Microsoft had already been phasing out use of the Nokia brand in favour of the Lumia and Microsoft names.
HMD Global will take over the right to use the Nokia brand for making phones, under a ten-year licence with Nokia which also includes access to certain cellular technology. Nokia said it will receive royalties on devices produced by HMD and Foxconn. It already partnered with Foxconn last year on the launch of its N1 Android tablet. Nokia said it has not invested in HMD, but it will have a seat on the HMD board in order to monitor use of its brand. The deal is in line with Nokia's strategy to focus on licensing rather than the manufacture of hardware.
FIH Mobile said it will manufacture the Nokia phones on behalf of HMD Global. According to Nokia, HMD was founded to provide a "focused, independent home for a full range of Nokia-branded feature phones, smartphones and tablets". Based in Helsinki, HMD intends to invest over USD 500 million over the next three years to support the global marketing of the devices. It will not adopt the Microsoft Windows OS, but instead use Google's Android for the new devices.
HMD said 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". Its agreement with FIH Mobile will give HMD full operational control over sales, marketing and distribution of its Nokia-branded devices, with exclusive access to the global sales and distribution network to be acquired by FIH from Microsoft, as well as access to FIH's device manufacturing and engineering capabilities and its proprietary mobile technologies and components.
Arto Nummela will be the CEO of HMD. He previously held senior positions at Nokia and is currently the head of Microsoft's Mobile Devices business for Greater Asia, Middle East and Africa, as well as Microsoft's global Feature Phones business. HMD's president will be Florian Seiche, who is currently Senior Vice President for Europe Sales and Marketing at Microsoft Mobile, and previously held key roles at Nokia, HTC and other global brands.
HMD is owned by Smart Connect, a private equity fund managed by Jean-Francois Baril, a former Nokia executive, as well as by HMD management. The board of HMD will consist of five members, including the one representative from Nokia.
