NEW YORK: Nokia is staging a comeback to the smartphone market as soon as next year, according to several sources speaking to Re/Code.
The once great mobile vendor, Nokia fell into disrepair after ex-chief executive Stephen Elop steered them towards Windows Phone, a mobile platform that was incapable of matching iOS’ App Store or Android’s user base and still has less than five per cent market share.
In 2013, Microsoft bought Nokia’s mobile division for £4.8 billion in a move many called traitorous, especially the Finnish who had lost their pride and joy in the technology world. Even with this setback, the Nokia Technologies group continued work on new projects involving mobiles, tablets and virtual reality devices.
This first project was revealed late last year as the Nokia N1, the tablet that is now available in China – manufactured and distributed by a local company. Reports say Nokia plans to create a similar business model for the smartphone coming in 2016, allowing manufacturers to use the Nokia brand, patents and designs in return for a cut of the sales.
This is a smart way to avoid the massive operating losses Nokia was running into a few years ago, instead licensing its technologies with virtually no overhead. It is a similar tactic employed by Polaroid and Kodak, after they went bankrupt, in order to make some quick cash without having to open up the factories again.
We expect Nokia has learned its lesson and the smartphone will run Android. Nokia has already worked on a launcher for Android, meaning it will be quite easy for them to create a full user interface to compliment whatever version of Android is available in 2016.
The deal between Microsoft and Nokia blocks them from launching the smartphone now, but that deal will be over by 2016. We expect the first smartphone may be picked up by a distributor in India or China, meaning it is unlikely people in the West will be able to buy a Nokia smartphone anytime soon.
The report also indicates Nokia is working on some really awesome products in the next few years, including a virtual reality headset. It would be nice to see Nokia backs to its old ways of innovating instead of sitting on small market share with no real future prospects.
Nokia recently acquired Alcatel-Lucent for £11 billion, in a move to become the number one networking company in the world. It currently competes with Ericsson and Huawei for market share, but this acquisition should put them above both in the market.
It plans to pay for the acquisition with the money from Microsoft’s acquisition and a potential sale of its mapping technology and patents, said to be worth between £2 billion and £4 billion.
