Nokia to return to mobile phone market as early as next year

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Four years ago, then-Nokia CEO Stephen Elop likened the company to a person on the brink of a burning platform, one that was fueled by Nokia's failure to see that upstarts like Apple and Google had transformed the mobile phone market as its competitors prospered.

In hindsight, the "burning platform" email can be seen as a precursor to Nokia's sale of its mobile phone business to Microsoft in 2013. This deal was seen by many Finns as a bargain sale of the Nokia mobile phone brand. However, the established fact is that the business that once produced a phone as popular as the current iPhone no longer exists.

So it is somewhat surprising to hear that Nokia is now quietly making an exploratory return to the consumer mobile phone market.

Nokia plans to return to the mobile phone market as early as next year, two people familiar with the matter told Re/code, and the company will also pursue other ambitious product projects such as virtual reality.

Leading the effort is Nokia Technologies, the smallest of the three businesses left after Nokia sold its mobile phone business to Microsoft Corp. The others are mapping and network equipment. Nokia Technologies is best known for its licensing of Nokia's portfolio of more than 10,000 patents.

Unlike other companies whose patent departments are limited to patent licensing, Nokia Technologies is also responsible for designing new products and licensing patents to other companies. So far, the projects planned are small. The department has just released two new products, namely the Android desktop theme launcher application Zlauncher and the Android tablet N1 manufactured by others. Nokia's return to the mobile phone market may take the same approach as the tablet.

Insiders say these products are just the beginning.

“They have a lot of great products in the pipeline,” said Richard Kerris, a former Nokia executive. “That gives me every reason to believe that Nokia as a company is not far gone.”

Although Chris did not give details, he said that some of the products he has seen will be shocking once they are launched on the market.

Road to revival

After communicating with sources close to Nokia and some insiders, we found that the company's situation is not as described by the outside world as having become an obsolete product of technological development.

Nokia is also cautious about its current work. According to the agreement reached with Microsoft, the company cannot sell any Nokia-branded mobile phone products before the end of this year, and Nokia cannot authorize or use the brand in mobile phones at least before the third quarter of next year. However, this agreement does not affect Nokia's restart in the mobile phone field after the contract expires. In fact, Nokia has been recruiting and working hard to develop products for next year and even in the future.

Nokia Technologies has offices in Sunnyvale, California, Cambridge, England, Espoo and Tampere, Finland. It grew out of the old Nokia's Chief Technology Officer (CTO) office, providing technical support for future product development. Although Nokia's smartphone business has focused on Windows Phone in recent years, the department still focuses on other products such as mobile phones and tablets.

The division recruited former Dolby Labs executive Ramzi Haidamus as president last year and hired longtime Cisco employee Guido Jouret as its CTO last week.

Even if Nokia returns to the mobile phone market, don't expect large-scale mass production, because Nokia just sold its mobile phone production business to Microsoft, and the company is not in a hurry to return to its previous scale.

The N1 tablet is a good example of Nokia's future model, which is to license the design and Nokia brand to other companies through a cool design. These companies are only responsible for production, while Nokia is still responsible for sales and release. This approach is similar to the methods used by Kodak and Polaroid, which returned to the market after bankruptcy.

Licensing the brand to others can reduce costs, but whether the product will be successful is not completely controlled by Nokia. In addition, the current competition in the smartphone market is fierce. Some companies may not be able to achieve results even if they invest tens of millions of dollars in R&D and marketing every year. Nokia, which has just withdrawn from the mobile phone market, must have a deeper understanding of this. The idea of ​​developing super cool products is one thing, and concentrating resources to make the products successful in the market is another.

Nokia's success or failure will depend on the leadership's support for these new products. Nokia Technologies has a long history of developing products, but in Nokia's recent years of decline, it has not yet made a name for itself.

Nokia is looking to buy Alcatel-Lucent and possibly sell its mapping business. In doing so, Nokia is intent on positioning itself as a network equipment provider. At the same time, there is a logic that Nokia can develop equipment to match its own network, so that the company can adjust its equipment development at any time and achieve contraction. Take Ericsson, for example. Ericsson was a large mobile phone manufacturer before forming a joint venture with Sony, but the company eventually divested its mobile phone business completely.

Regarding the future of Nokia Technologies after the acquisition of Alcatel-Lucent, Nokia said that everything will remain the same. It will focus entirely on new technologies and share these new technologies through active licensing projects.

As for future plans, Nokia promised to expand into some exciting areas and strive to tap into human potential in a connected world, but the company is not in a position to comment too much on what will happen next.