Nokia on plans to reenter mobile space: 'It's complicated'

The company says it will create a "brand-licensing model" that could see Nokia devices again hit store shelves -- if it can find the right partner.

Don Reisinger
CNET contributor Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.
Don Reisinger
3 min read

Nokia may eventually get back into the smartphone business. CNET

A Nokia Technologies spokesman has answered a question that has been asked ever since the company sold its Devices business to Microsoft: Will Nokia ever get back into the mobile devices business?

The answer..."It's complicated."

Spokesman Robert Morlino wrote Monday in a company blog post that Nokia has plans to reenter the mobile devices business but wouldn't follow its past strategy of designing and building its own products. Instead, the company would engage in a "brand-licensing model," providing manufacturers design ideas as well as the Nokia branding, and require its partner to handle all "manufacturing, sales, marketing, and customer support for a product."

"To summarize, we will look for the right partner who can take on the heavy lifting and work closely with us to deliver a great product," Morlino wrote.

Morlino's comment marks the first time Nokia has confirmed plans to get back into the mobile business. Over the last several months, reports have been suggested that Nokia had plans for a return to mobile, but the company had kept quiet.

Getting back into the smartphone business would be an important, but potentially difficult, reboot for Nokia. The company was once the dominant handset maker in the world, but failed to adapt swiftly to the touchscreen smartphone craze and soon found itself well behind Samsung and Apple. As Nokia tried to rebuild its business, customers increasingly turned elsewhere.

Last year, Microsoft acquired Nokia's phone business for $7.2 billion. The deal called for Microsoft to have the rights to use the Nokia name for a period of time and to continue producing Nokia smartphones through 2015. What was left of Nokia after the sale was its Here mapping business, its massive patent portfolio and its mobile-communications division.

In retrospect, Microsoft may have regrets about the deal. Last week, Microsoft announced it would cut 7,800 jobs, largely from the company's phone business, and record a charge of $7.6 billion to write down assets related to the acquisition of Nokia's devices business. The move was an admission that building handsets to compete with Apple iPhones and smartphones running Google's Android operating system has been a struggle. Microsoft did, however, say that it will not entirely exit the smartphone business.

Although Microsoft seemingly has less interest in operating a mobile devices business, that doesn't make the path to reentering the niche any simpler for Nokia. For one, the deal with Microsoft gives the company control over the "Lumia" smartphone branding Nokia had previously used with its Windows Phone-based smartphones. In addition, the deal requires that Nokia not enter the smartphone business again until the fourth quarter of 2016, meaning a Nokia smartphone wouldn't be available until late next year at the earliest.

Morlino was clear that a Nokia smartphone launch is no guarantee. He said his company would be seeking a "world-class partner" to build devices with its name on it. He didn't say if Nokia is already in talks with vendors.

It's also unclear what operating system Nokia would choose for a new handset. Before the company sold off its Devices business, Nokia was building flagship handsets bundled with Windows Phone. However, late last year, Nokia announced the N1 tablet, which runs on Android OS. It's unclear whether the deal with Microsoft requires the company to use Windows Phone, but since the N1 is Android-based, it seems at least possible that Google's platform would be the chosen platform for a new branded smartphone.

Nokia did not immediately respond to a request for comment.