The Nokia headquarters is seen in Espoo, Finland April 6, 2016. REUTERS/Antti Aimo-Koivisto/Lehtikuva/File Photo
The Nokia headquarters is seen in Espoo, Finland April 6, 2016.
REUTERS/ANTTI AIMO-KOIVISTO/LEHTIKUVA/FILE PHOTO
The Nokia name will return to the mobile phone market after a company backed by one of its former executives teamed up with manufacturer Foxconn (2354.TW) to buy the rights to the brand for mobile devices.
Nokia (NOKIA.HE), once the world’s biggest maker of mobile phones, was wrong footed by the rise of smartphones and eclipsed by Apple and Samsung. It sold its entire handset business to Microsoft Corp (MSFT.O) in 2014 and now focuses on telecoms network equipment.
But it held on to its phone patents with a view to eventually striking a licensing deal, though it had to wait due to a non-compete deal with Microsoft.
Nokia said on Wednesday it had signed an exclusive 10-year licensing agreement for newly formed Finnish company HMD global Oy to create Nokia-branded smartphones and tablets. HMD is owned by Smart Connect LP, a private equity fund run by former Nokia executive Jean-Francois Baril, and its management.
The products will be made by Taiwan’s Foxconn and Nokia will receive an undisclosed royalty on sales, covering both brand and intellectual property rights.
Microsoft announced simultaneously it would sell its entry-level phones business to HMD and Foxconn subsidiary FIH Mobile for $350 million.
Nokia, whose global market share in handsets peaked at around 40 percent in 2008, said its brand remained widely recognized, especially in developing markets.
“The areas where we believe the brand is strongest are Asia, South America and parts of Europe. Clearly China will be one of the target markets,” Ramzi Haidamus, chief executive of the Nokia Technologies unit, told Reuters.
Nokia stock rose 2.9 percent to 4.67 euros.
“Nokia seems to have put together a very elegant deal in order to maximize the potential to drive some revenue from the handset business, with no risk in terms of hardware,” said Ben Wood, an analyst at research firm CCS Insight.
“The brand is strong in the feature phone space, but does it stand for a cutting-edge future proof smartphone? That’s unclear. … It’s a brand that has lost its lustre,” he added.
HMD, which will focus on branding and design in the partnership with Foxconn, said it would put 500 million euros ($564 million) into marketing over the next three years.
Nokia declined to provide revenue targets related to the licensing deal, nor a timetable for new devices, which will use Google’s Android platform. The deal between Microsoft, Foxconn and HMD is expected to close in the second half of 2016.
Jukka Oksaharju, a strategist at brokerage Nordnet, said annual licensing revenues for Nokia would likely be in the tens of millions.
Microsoft has struggled with phones after the 2014 deal with Nokia, and last year it wrote off $7.5 billion from the business. Microsoft said on Wednesday it would continue to develop its Lumia smartphones.
(Additional reporting by Tuomas Forsell; Editing by Jason Neely and Mark Potter)
HMD Global launches first Nokia smartphone
A new Nokia 6 smartphone is seen in this handout image released by HMD to Reuters on January 7, 2017. HMD/Handout via Reuters
HMD Global, the Finnish company that owns the rights to use Nokia’s brand on mobile phones, announced on Sunday its first smartphone, targeted for Chinese users with a price of 1,699 yuan ($246).
The launch marks the first new smartphone carrying the iconic handset name since 2014 when Nokia Oyj (NOKIA.HE) chose to sell its entire handset unit to Microsoft (MSFT.O).
The new device, Nokia 6, runs on Google’s (GOOGL.O) Android platform and is manufactured by Foxconn (2354.TW). It will be sold exclusively in China through online retailer JD.com (JD.O), HMD said.
“The decision by HMD to launch its first Android smartphone into China is a reflection of the desire to meet the real world needs of consumers in different markets around the world… it is a strategically important market,” HMD said in a statement.
Nokia was once the world’s dominant cellphone maker but missed the shift to smartphones, and then chose Microsoft’s Windows operating system for its “Lumia” range.
After the 2014 deal, Microsoft continued selling cheaper basic phones under Nokia’s name and Lumia smartphones under its own name, but last year, it largely abandoned both businesses.
HMD in December took over the Nokia feature phones business and struck a licensing deal that gave it sole use of the Nokia brand on all phones and tablets for the next decade.
It will pay Nokia royalties for the brand and patents, but Nokia has no direct investment in HMD. Nokia Oyj is currently focused on telecom network equipment business and technology patents.
HMD CEO Arto Nummela, who was once responsible for Nokia’s sales and product development, told Reuters last month that HMD aims to be one of the key competitive players in the smartphone business where it faces tough competition from Apple (AAPL.O), Samsung (005930.KS) and dozens of other players.
HMD launched some new Nokia basic phones last month. It said on Sunday it was looking to launch more new products in the first half of the year.
(Reporting by Jussi Rosendahl and Eric Auchard)
Nokia sues Apple for infringing patents, industry back on war footing
Headquarters of Finnish telecommunication network company Nokia are pictured in Espoo, Finland August 4, 2016. Lehtikuva/Irene Stachon/via REUTERS
Nokia Corp. said on Wednesday it had filed a number of lawsuits against Apple Inc. for violating 32 technology patents, striking back at the iPhone maker’s legal action targeting the one-time cellphone industry leader a day earlier.
Nokia’s lawsuits, filed in courts in Dusseldorf, Mannheim and Munich, Germany, and the U.S. District Court for the Eastern District of Texas, cover patents for displays, user interfaces, software, antennas, chipsets and video coding.
“Since agreeing a license covering some patents from the Nokia Technologies portfolio in 2011, Apple has declined subsequent offers made by Nokia to license other of its patented inventions which are used by many of Apple’s products,” Nokia said in a statement.
Apple on Tuesday had taken legal action against Acacia Research Corp. and Conversant Intellectual Property Management Inc., accusing them of colluding with Nokia to extract and extort exorbitant revenues unfairly from Apple.
“We’ve always been willing to pay a fair price to secure the rights of patents covering technology in our products,” said Apple spokesman Josh Rosenstock. “Unfortunately, Nokia has refused to license their patents on a fair basis and is now using the tactics of a patent troll to attempt to extort money from Apple by applying a royalty rate to Apple’s own inventions they had nothing to do with.”
Acacia and Conversant did not immediately respond to requests for comment, and Nokia was not immediately available to comment on the Apple lawsuit.
The legal action by Nokia and Apple appear to mark a revival of the “smartphone patent wars” that began five years ago, when Apple filed a series of patent infringement cases against Samsung Electronics around the world, with wins and losses on both sides.
Apple’s lawsuit against Acacia, Conversant and Nokia was filed only one day after Ottawa-based Conversant named Boris Teksler as its new chief executive. He had worked as Apple’s director of patent licensing and strategy from 2009 to 2013, the latter half of his tenure overlapping with the lawsuits against Samsung.
Acacia is a publicly traded patent licensing firm based in Newport Beach, California. One of its subsidiaries sued Apple for patent infringement and was awarded $22 million by a Texas jury in September.
Similarly, Conversant, which claims to own thousands of patents, announced last week that a Silicon Valley jury had awarded one of its units a $7.3 million settlement in an infringement case against Apple involving two smartphone patents.
Nokia, once the world’s dominant cellphone maker, missed out on the transition to smartphones triggered by Apple’s introduction of the iPhone in 2007.
The Finnish company sold its handset business to Microsoft Corp. two years ago, leaving it with its telecom network equipment business and a bulging portfolio of mobile equipment patents.
But this year, Microsoft sold its Nokia-feature phone business to a new company called HMD Global.
Nokia agreed to a 10-year licensing deal with HMD, which continues to market low-cost Nokia phones and plans to introduce new Nokia smartphone models next year. — Reuters
Nokia prices virtual reality camera at $60,000
A view of Nokia head offices in Espoo April 14, 2015.
Finland’s Nokia on Tuesday said it will price its virtual reality camera at $60,000 and begin its shipments in the first quarter of next year.
Launched initially in July, the spherical camera features eight sensors and microphones and it is designed for making 3D movies and games that can be watched and played with virtual reality headsets.
Once the world’s largest mobile phone maker, Nokia is now focused on making telecom network equipment. It is also planning to come back to the phone business by designing and licensing handsets next year.
(Reporting by Jussi Rosendahl, editing by Louise Heavens)