Rumor: Nokia Getting Back into the Phone Business?

According to an article by Re/Code, Nokia is planning on getting back into the mobile phone business. After the sale of its device business to Microsoft, many analysts believed that we had seen the last of any new phone from Nokia. This idea was reinforced after Nokia announced plans to acquire Alcatel-Lucent and create a major networking equipment company (Nokia and Alcatel-Lucent Sign MOU). At the same time the company announced an evaluation of what to do with the HERE business unit, which is in charge of the mapping and other phone related business.

According to the article however, the driver behind getting back into the phone business is the Nokia Technologies unit, which is in charge of the massive patent portfolio Nokia still has in the mobile space. It is of course unclear how the Microsoft acquisition of the device group fits into the mobile patent landscape.

The article explains that in Microsoft’s acquisition contract, Nokia agreed to not sell any Nokia-branded phones through 2015 or license the Nokia brand name through to the third quarter of 2016. It is not clear how Re/Code knows such details from the contract but, if true, it would allow Nokia to get into the phone market relatively quickly. As a side note, the latest Microsoft phones are marketed as ‘Microsoft Lumia’ phones, indicating that Microsoft may own the Lumia brand name but not the “Nokia Lumia” brand name.

The article also states that Nokia is not looking at creating a new device manufacturing unit, but instead is likely employ a design and marketing strategy, similar to other smartphone makers including Apple. This idea is similar to the way that the Nokia N1 tablet was released earlier this year. The N1 tablet is an Android device and if the article is correct in predicting the Nokia plans, it is very possible that Nokia will be joining the Android smartphone world pretty soon.

Re/Code quotes insiders at Nokia as its sources, which would mean that this plan is at least in discussion at Nokia.

Analyst Comment

The Nokia brand still has a lot of draw in many regions of the world. In many areas, Nokia phones are still offered for sale and a return to the phone business is not as far fetched as some may think. Based on its experience and technical abilities, it should be rather straight forward to accomplish such a step.

Nokia as a company is far from disappearing in the CE world and there are many options on how the company could make a comeback. The phone business is just one option I believe. Nevertheless, it is a very intriguing option that would make one wonder who got the better end of the Microsoft – Nokia deal. – NH