Nokia is planning a return to the mobile phone market, after selling its entire mobile division to Microsoft in 2014, the UK’s Register reported on Tuesday.
The surprising news comes as the Finnish firm’s Nokia Technologies division has been hiring employees, and already has products under development, with an eye to reenter the market next year, the report notes.
The second half of 2016, not coincidentally, is when Nokia will no longer be bound by the terms of the agreement it signed with Microsoft.
Under that agreement, Nokia was barred from selling “smart devices” until the end of 2015, and it couldn’t license the brand to another manufacturer until the third quarter of 2016. Microsoft, meanwhile, was granted an exclusive license to label its phones “Nokia” for the same period. But the software giant has already retired the brand from its smartphone line, preferring the “Microsoft Lumia” name.
Even after its smartphone branding license expires, Microsoft will still be able to market feature phone based on the System 40 and System 60 operating systems under the Nokia brand for at least another eight years.
After offloading its sickly phone business, Nokia has returned to profitability and shown strong growth last year. That success has been driven by the momentum of its Nokia Networks business, which reported $3.65 billion in net sales in its most recent quarter alone. Now Nokia is looking to expand that business even further by buying Alcatel-Lucent, the French mobile systems company.
The Nokia Technologies business group is only one line the firm’s balance sheet. The group brought in $139 million in sales in the fourth quarter of 2014, or 4 percent of the total. Its only notable product in the past year was the N1 tablet, which hasn’t had much traction with consumers.
Getting back into the mobile device market in a serious way will require a significant marketing push, especially given that the only new Nokia devices to emerge in recent years have been Windows Phone devices sold by Microsoft.
