Nokia has announced plans that will see the Nokia brand return to
the mobile phone and tablet markets on a global basis. Under a
strategic agreement covering branding rights and intellectual
property licensing, Nokia Technologies will grant HMD global Oy
(HMD), a newly founded company based in Finland, an exclusive
global license[1] to create Nokia-branded mobile phones and tablets
for the next ten years. Under the agreement, Nokia Technologies
will receive royalty payments from HMD for sales of Nokia-branded
mobile products, covering both brand and intellectual property
rights.
HMD has been founded to provide a focused, independent home for
a full range of Nokia-branded feature phones, smartphones and
tablets. To complete its portfolio of Nokia branding rights, HMD
announced today that it has conditionally agreed to acquire from
Microsoft the rights to use the Nokia brand on feature phones, and
certain related design rights. The Microsoft transaction is
expected to close in H2 2016. Together these agreements would make
HMD the sole global licensee for all types of Nokia-branded mobile
phones and tablets. HMD intends to invest over USD 500 million over
the next three years to support the global marketing of
Nokia-branded mobile phones and tablets, funded via its investors
and profits from the acquired feature phone business.
Nokia-branded feature phones remain one of the most popular
choices of mobile phone in many markets around the world today, and
HMD will continue to market them as part of an integrated portfolio
alongside a new range of smartphones and tablets. HMD's new
smartphone and tablet portfolio will be based on Android, uniting
one of the world's iconic mobile brands with the leading mobile
operating system and app development community.
As also announced today by FIH Mobile Limited (FIH), a
subsidiary of Hon Hai Precision Industries (trading as Foxconn
Technology Group), the remainder of Microsoft's feature phone
business assets, including manufacturing, sales and distribution,
would be acquired by FIH. HMD and Nokia Technologies have signed an
agreement with FIH to establish a collaboration framework to
support the building of a global business for Nokia-branded mobile
phones and tablets. This agreement will give HMD full operational
control of sales, marketing and distribution of Nokia-branded
mobile phones and tablets, with exclusive access to the pre-eminent
global sales and distribution network to be acquired from Microsoft
by FIH, access to FIH's world-leading device manufacturing, supply
chain and engineering capabilities, and to its growing suite of
proprietary mobile technologies and components.
Nokia will provide HMD with branding rights and cellular
standard essential patent licenses in return for royalty payments,
but will not be making a financial investment or holding equity in
HMD. Nokia Technologies will take a seat on the Board of
Directors of HMD and set mandatory brand requirements and
performance related provisions to ensure that all Nokia-branded
products exemplify consumer expectations of Nokia devices,
including quality, design and consumer focused innovation.
HMD would be led, once the Microsoft transaction closes, by Arto
Nummela as CEO, who previously held senior positions at Nokia and
is currently the head of Microsoft's Mobile
Devices business for Greater Asia, Middle East and Africa, as
well as Microsoft's global Feature Phones business. HMD's president
on closing would be Florian Seiche, who is currently Senior Vice
President for Europe Sales and Marketing at Microsoft Mobile, and
previously held key roles at Nokia, HTC and other global
brands.
Ramzi Haidamus, president of Nokia Technologies, said: "Today
marks the beginning of an exciting new chapter for the Nokia brand
in an industry where Nokia remains a truly iconic name. Instead of
Nokia returning to manufacturing mobile phones itself, HMD plans to
produce mobile phones and tablets that can leverage and grow the
value of the Nokia brand in global markets. Working with HMD and
FIH will let us participate in one of the largest consumer
electronics markets in the world while staying true to our
licensing business model."
Arto Nummela, CEO-designate of HMD, said: "We will be completely
focused on creating a unified range of Nokia-branded mobile phones
and tablets, which we know will resonate with consumers. Branding
has become a critical differentiator in mobile phones, which is why
our business model is centered on the unique asset of the Nokia
brand and our extensive experience in sales and marketing. We will
work with world class providers in manufacturing and distribution
to move quickly and deliver what customers want."
Vincent Tong, Chairman of FIH, added: "We are looking forward to
fostering a strong and long-term collaboration with HMD global and
Nokia. We are impressed by the experience and expertise
of the HMD management team and are committed to supporting them
with our manufacturing, technology and supply chain capabilities,
to capture market opportunities together in the future."
1 Excluding Japan
About Nokia Technologies Nokia Technologies (TECH) is
Nokia's advanced technology and licensing business. Formed in 2014,
TECH builds upon Nokia's solid foundation of industry-leading
licensing and technology R&D capabilities. By focusing on
Digital Health, Digital Media, Brand Licensing, and Patent
Licensing, TECH is expanding the human possibilities of the
ever-evolving world of technology. In 2015, Nokia Technologies
launched OZO, the world's first virtual reality (VR) camera
designed for professionals.
About Nokia Nokia is a global leader in the technologies
that connect people and things. Powered by the innovation of Bell
Labs and Nokia Technologies, the company is at the forefront of
creating and licensing the technologies that are increasingly at
the heart of our connected lives.
With state-of-the-art software, hardware and services for any
type of network, Nokia is uniquely positioned to help communication
service providers, governments, and large enterprises deliver on
the promise of 5G, the Cloud and the Internet of Things.
http://nokia.com
About HMD global Registered and headquartered in
Helsinki, Finland, HMD is a new private venture founded to create a
new generation of Nokia-branded mobile devices. HMD is run by a
group of experienced industry leaders, including CEO Arto Nummela,
previously of Nokia and currently the head of
Microsoft's Mobile Devices business for Greater Asia,
Middle East and Africa as well as Microsoft's global Feature Phones
business, and President Florian Seiche, who is currently Senior
Vice President for Europe Sales and Marketing at Microsoft Mobile,
and previously held key roles at Nokia, HTC and other global
brands. www.hmdglobal.com
ENQUIRIES
Media Enquiries: Nokia Communications Tel. +358 (0) 10
448 4900 Email: press.services@nokia.com
Brunswick (adviser to Nokia Technologies) Tel. +44 (0) 20 7404
5959 (London) Tel. +1 (415) 671 7676 (San Francisco) Tel. +86 (10)
5960-8600 (Beijing)
Investor Enquiries: Nokia Investor Relations Tel. +358
4080 3 4080 Email: investor.relations@nokia.com
RISKS AND FORWARD-LOOKING STATEMENTS
It should be noted that Nokia and its businesses are exposed to
various risks and uncertainties and certain statements herein that
are not historical facts are forward-looking statements, including,
without limitation, those regarding: A) expectations, plans or
benefits related to our strategies and growth management; B)
expectations, plans or benefits related to future performance of
our businesses; C) expectations regarding market developments,
general economic conditions and structural changes; D) expectations
and targets regarding financial performance, results, operating
expenses, taxes, cost savings and competitiveness, as well as
results of operations including targeted synergies and those
related to market share, prices, net sales, income and margins; E)
timing of the deliveries of our products and services, including
expected deliveries of Nokia-branded products collaboration and
partnering arrangements; F) expectations and targets regarding
collaboration and partnering arrangements, as well as our expected
customer reach; G) expectations regarding restructurings,
investments, uses of proceeds from transactions, acquisitions and
divestments and our ability to achieve the financial and
operational targets set in connection with any such
restructurings, investments, divestments and acquisitions; and H)
statements preceded by or including "believe," "expect,"
"anticipate," "foresee," "sees," "target," "estimate," "designed,"
"aim," "plans," "intends," "focus," "continue," "project,"
"should," "will" or similar expressions. These statements are based
on the management's best assumptions and beliefs in light of the
information currently available to it. Because they involve risks
and uncertainties, actual results may differ materially from the
results that we currently expect. Factors, including risks and
uncertainties, that could cause such differences include, but are
not limited to: 1) our ability to execute our strategy, sustain or
improve the operational and financial performance of our business
or correctly identify or successfully pursue business opportunities
or growth; 2) our dependence on general economic and market
conditions and other developments in the economies where we
operate; 3) our dependence on the development of the industries in
which we operate, including the telecommunications industry; 4) our
exposure to regulatory, political or other developments in various
countries or regions, including emerging markets and the associated
risks in relation to healthcare, tax matters and exchange controls,
among others; 5) our ability to effectively and profitably compete
and invest in new competitive high-quality products, services,
upgrades and technologies and bring them to market in a timely
manner; 6) our dependence on a limited number of customers and
large multi-year agreements; 7) Nokia Technologies' ability to
maintain and establish new sources of patent licensing income and
IPR-related revenues, particularly in the smartphone market; 8) our
dependence on IPR technologies, including those that we have
developed and those that are licensed to us, and the risk of
associated IPR-related legal claims, licensing costs and
restrictions on use; 9) our exposure to direct and indirect
regulation, economic or trade policies, and the reliability of our
governance, internal controls and compliance processes to prevent
regulatory penalties; 10) our reliance on third-party solutions for
data storage and the distribution of products and services, which
expose us to risks relating to security, regulation and
cybersecurity breaches; 11) Nokia Technologies' ability to generate
net sales and profitability through licensing of the Nokia brand,
the development and sales of products and services, as well as
other business ventures which may not materialize as planned; 12)
our ability to retain, motivate, develop and recruit appropriately
skilled employees; 13) our ability to manage our manufacturing,
service creation, delivery, logistics and supply chain processes,
and the risk related to our geographically concentrated production
sites; 14) exchange rate fluctuations; 15) inefficiencies,
breaches, malfunctions or disruptions of information technology
systems; 16) our ability to achieve targeted benefits from or
successfully implement planned transactions, as well as the
liabilities related thereto; 17) performance failures by our
partners or failure to agree to partnering arrangements with third
parties; and 18) our ability to manage and improve our financial
and operating performance, cost savings, competitiveness and
synergy benefits after the acquisition of Alcatel Lucent, as well
as the risk factors specified on pages 69 to 87 of our annual
report on Form 20-F filed on April 1, 2016 under "Operating and
financial review and prospects-Risk factors", as well as in Nokia's
other filings with the U.S. Securities and Exchange Commission.
Other unknown or unpredictable factors or underlying assumptions
subsequently proven to be incorrect could cause actual results to
differ materially from those in the forward-looking statements. We
do not undertake any obligation to publicly update or revise
forward-looking statements, whether as a result of new information,
future events or otherwise, except to the extent legally
required.
HUG#2013534
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