Nokia-branded smartphones may not be dead—they just won’t be made by Nokia, let alone Microsoft.
Confused? That’s understandable, since Microsoft’s $7 billion acquisition of Nokia’s devices business closed this past spring. With the purchase came the Nokia brand, which Microsoft officially dropped with its most recent addition, the Lumia 535.
Nokia, meanwhile, retained several businesses: its enterprise networks, its HERE mapping subsidiary, and assorted, largely overlooked licensing and technology businesses. It’s that licensing subsidiary that Nokia plans to exploit, according to Nokia executives speaking at an investor day, according to NokiaPowerUser.
While Microsoft has a 10-year license to use the Nokia brand—one which it will apparently use only on cheaper models—Nokia, too, has the right to license the Nokia name to third parties beginning in the fourth quarter of 2016. It also has the right to do so on “other devices” immediately—presumably, devices that don’t directly compete with anything Microsoft sells.
As NokiaPowerUser points out, that would mean that Nokia could still design phones—but do so with Taiwan and Chinese ODMs (original design manufacturers) taking on roles from design to component sourcing to actually producing the phones themselves.
If Nokia can do so, it raises all sorts of questions: Why did Microsoft spend so much money acquiring Nokia? To cut costs, why didn’t Nokia pursue an ODM route before?
Nokia has at least a year before it would need to make that decision—assuming another year, of course, to design, build, and produce any new Nokia-branded phones. Note that any new phones wouldn’t necessarily retain the brightly colored schemes of the current Lumia Windows Phones—or even be Windows Phones, for that matter.
In any event, the door’s open for experimentation. If you could build the next Nokia phone, what would it look like?
Why this matters: If it does bring back the Nokia brand, its executive team has the political cover to start afresh with a blank slate. Granted, a deal would bring Nokia a relatively small amount of licensing revenue, but the brand wouldn’t entirely go away, either.