Do not look for Nokia to return to the smartphone business in 2016, says current CEO

As Microsoft solidifies its rebranding of the Nokia mobile division heading into 2015, there is one rumor that just won't die: Nokia wants to make smartphones again.

Certainly there is nostalgia behind the iconic brand, something that current Nokia CEO Rajeev Suri clearly understands. However, there is just too much navel-gazing these days for 'clues' in Nokia's Facebook and Twitter posts that Nokia wants to make phones again. Luckily, Suri today made it clear that Nokia has no plans to return to smartphones.

Old news is not new news

During the original purchase announcement of the Nokia mobile division by Microsoft, it was made clear that Nokia as a company could not get back into smartphones until Q4 of 2016. After licensing out their smartphone patents and turning over all of their star employees to Microsoft, Nokia is now barren of nearly all of their mobile resources. That is after all, the point of the sale.

The problem is many people keep looking towards that 2016 date as some kind of jumping off point for Nokia. Would Nokia actually try to rebuild everything they just sold off to jump into an industry that nearly destroyed the company? If Microsoft is struggling in 2014 in the smartphone market, what chance would a nascent 'new' Nokia with no proprietary OS or engineering team have in the business?

Setting the record straight

Earlier today in a London analyst meeting Nokia CEO Rajeev Suri outlined Nokia's future business strategy. It includes Nokia's further development of its HERE Maps, Networks, and Technologies divisions, which have already returned the company to profitability.

For HERE Maps, Nokia is continuing to use Microsoft, Yahoo, and others as proxies for their mapping technology. Nokia HERE Maps will not take on Google directly but instead Nokia will utilize a B2B2C (business to business to consumer) policy.

Currently, Networks is Nokia's biggest play in the technology field where they still maintain many patents, including 4G and 5G technologies, which they will continue to license and develop.

Finally, the Technologies division is where consumer-facing products could return in late 2016. However, Suri noted that although Nokia may license out their brand in the future, they are not considering a return to direct consumer handsets. As noted in an excellent analysis by ZDNet's Jo Best:

"We are not looking to a direct consumer return to handsets per se," he said, but added that the Nokia "brand will return to the consumer world" through licensing deals in the longer term."

So yes, Nokia as a brand may live on in many forms, including set-top boxes, digital cameras, and maybe even smartphones, but not directly as Nokia-manufactured devices.

As mentioned earlier, the notion a CEO would steer his company back into a field in which they just left due to the division effectively failing would be a terrible idea. There would be too much risk in capital for the company whereas licensing the Nokia brand is a much safer and risk adverse endeavor to pursue.

In other words, let it go. There will be no more Nokia-developed smartphones.

Source: Nokia; via ZDNet

Daniel Rubino

Daniel Rubino is the Editor-in-chief of Windows Central, head reviewer, podcast co-host, and analyst. He has been here covering Microsoft since 2007 when this site was called WMExperts (and later Windows Phone Central). His interests include Windows, Microsoft Surface, laptops, next-gen computing, and for some reason, watches. Before all this tech stuff, he worked on a Ph.D. in linguistics and ran the projectors at movie theaters, which has done absolutely nothing for his career.

  • Good. That settles it.
  • The CEO is lying just like a politician: "No, I'm not running for office in 2016....liar!
  • They don't have the resources to try a gamble like that. They couldn't make it two years ago, why would they all of the sudden be able to in two years.
  • Nokia was sold for millions. And now they are making profit. They have money!
  • They'll merely license the name to a Chinese company that can crank out the phones cheaper and with less overhead. They'll make lots from licensing without any risk. There are lots of excellent Chinese manufacturers such as Lenovo nowadays.
  • Doubt it. They can't make iOS devices (obviuously) Android would cost them a fee and make them uncompetitive. Windows would be free, but they would be up against MS and other chinese manufactures doing it for themselves. There is 0 business sense in Nokia re-entering the smartphone market. (And no, just no, not even Meego. Don't even go there, before DJCBS chimes in with that nonsense)
  • You have it backwards. Android would be free for Nokia, because they own the patents to protect them from any troll tax. WP wouldn't be free unless its a small screen low end device. 
  • Nope. The one who hold the patents is Microsoft. Samsung, HTC, etc are paying royalties regarding Android to Microsoft. Not Nokia. They pay Nokia for hardware related patents. If Nokia making Android phones, they have to pay royalties to Microsoft like Samsung, HTC, etc. As for Windows Phone, no mater what screen size they pick, it will be free, since the limitation was 9" and under. They won't make a 10" smartphones, do they?
  • You're wrong again, my man. Nokia has TONS of software patents as well, being the INVENTORS of smartphones. Nokia pays very little to anyone to make smartphones, which is why their patent portfolio is so valueable long term, and why it was so important that they stop making phones. By them not competiting, they no longer have to comply with the fair use negotiation for licensing their tech.
    Microsoft has a long term patent licensing agreement as part of the sale, but no one else does, and has to pay the piper. 
    I should say I'm not just guessing, having been a smartphone journalist for a decade, and former Senior Editor of Symbian-Freak, I was able to see the development first hand of how the smartphone patent wars were semi-settled. Nokia is the base for all smartphones. Symbian is the Godfather, and if you want to play this game, Nokia gets a cut, each and every time.
    Oh yeah, its not just Window PHONE, but ALL Windows that's free. LOTS of sub 10" display devices running Windows 8.1, especially tablets, BECAUSE of this. It won't matter anyway, since going forward, there's only one Windows, and that's Windows 10.
  • sailfish  
  • Huawei maybe not Lenovo
  • Billions, actually.
  • You mean billions
  • I think you mean Billions.
  • they were sold for a couple billion, but that's not a good reason to go into an ultra competative market with razor thin margins.
  • The issue with Nokia was they were so heavily leveraged in the low margin/low end segment. If Nokia returned like an Apple, and only made one or two super high end devices, or maybe one running Android, another running WP, at the highest spec level, the profits would be much greater, and they certainly have the cachet to do so.   
  • You don't  just "return like an Apple". You have to earn your spot there at the top
  • Nokia was at the top AND PROFITABLE before they decided to go WP. EVEN WITH THE LOW END. Had they just dropped the low end (Symbian) and kept the high end as their focus (Maemo), they'd be still at the top. 
  • they are proftable since dumping the phone division. they just raised their earnings estimate for next year. why would they spend billiôns rebuilding their phone manufacturing and design division when they likely would break even or lose money like most of the android oems?
  • The sad part is since they didnt do Android too, we will never know. They went all in with WP. Wild thing is Motorola went all in with Android. And since some of the same things are happeneing to both companies we should compare them even more. Which brand is stil intact.... Until the day Motorola no longer exists, its name is erased from products, I feel Motorola is in a better position. Just from marketing, ads alone Motorola can make some extra money with its name. What can Nokia market?
  • Rajeev's Words:
    We are not looking to a direct consumer return to handsets per se," he said, but added that the Nokia "brand will return to the consumer world" through licensing deals in the longer term.
    "The Nokia brand is still extremely powerful and we see considerable interest in licensing. We will pursue it... in a thoughtful and considered way," he said.
    It will be interesting to see what the licensing deals yield for such a powerful brand. What OEMs will take part and exactly how those deals will be manifest in the industry. It does seem that Nokia will be "present" in smartphone industry in some form or another in future. It may not be what fans have hoped for, but it will be "something".
    If anything can be said about Nokia is that its a company that adapts! They have gone through so many changes: Papermill, boots, rubber etc!
    Change I inevitable. Thier thoughtful and considered "indirect" "re-entry" into smartphone arena via licensing of thier technology, as Rajeev puts "extremely powerful brand" which they have "considerable interest" and stated objective to "pursue it", might not look like the Nokia of yesteryear that had thier own factories & made thier own hardware; but thier collaboration with other OEM's as they liscence thier technologies will simply be a different representation of the Nokia name in the smartphone arena in the future. Rajeev seems intent to pursue it.
    Fans may not like the "next" iteration of Nokia's representation in the smartphone arena, but it will still be Nokia. It is what it is. Can't change the past. Embrace the future.:-)
  • The problem I see for Nokia is this. When they sold there smartphone business to Microsoft all there software engineers the design people everything about a Nokia smartphones went to Microsoft. Therefore. Microsoft mobile is the closest you ever going to get to a real Nokia. If they license the Nokia brand out to other OEMs dont expect the same build quality the same support the same design or anything that people grew to love about Nokia. If you really like Nokia design and build and phones the best place to see that real hardware in action is Microsoft mobile. Like it or not that's were all of nokia's star players play today.
  • It's a brave new world!:-) Me, I'm looking forward to Windows 10 and what awesome Lumia Microsoft Mobile will grace us with next year. I have both the 1520 and 1020 now. I won't be able to do the duo smartphone upgrade in the future(first baby on the way!!!! :-) ) so a 1530 or 1030 or some awesome middle ground between the two, or the McLaren would all be tantalizing to me! At any rate I'm on the Microsoft train and looking for some great things in both hardware and software next year.
  • Agree, looking forward to new devices in Windows 10. Awesome potential.
  • Face palm!
  • More like sound strategy. I seriously question the mindset of people who think it would be a good idea for Nokia to make phones again...after it nearly wrecked the company and they sold off everything. All I can think is 'These people need to really steer clear of running a business or making leadership decisions".
  • Agreed!! I believe that there is inherent value in the Nokia brand as it relates to phones and therefore a play to license the brand to another smartphone maker is a good move.
  • @Daniel Do you think Microsoft will eventually make a move to purchase the remainder of Nokia just for the patents it holds?
  • They couldn't afford  it. TOO valueable an asset, and Nokia would never sell.
  • There isn't much MS can't afford. Whether Nokia would ever sell the rest, or if MS even wants it is a different story.
  • If Microsoft really wants to they could do you know how much money Microsoft has. And if Microsoft really wanted the rest of Nokia they could buy it cuz even Nokia has got a price
  • MS wanted to buy here services (maps and stuff) but they refused
  • Microsoft might not have wanted to pay Nokia's asking price ;-)
  • They have lots of money that can afford buying my whole country
    And they know that Bing maps is not good so they will want to buy here
    But Nokia's CEO refused to sell it :/
  • Yep, exactly.
  • Yes, thank you Daniel. I scratch my head anytime I read about Nokia coming back, etc. Why when it nearly killed the company.
  • Nearly killed them because they focused on a niche phone platform.
  • What about if a bunch of old Nokia employees create their own ODF and work on what they think should be an Android phone. This would give that company good buzz. Posted via the Windows Phone Central App for Android
  • Isn't that exactly was Jolla is?
  • Jolla is not Android
  • Yes it was created by ex Nokia employees.
  • Yup, I know.
  • There are a couple of startups in Finland trying to develop modular android phones (afaik not exactly the type that google's ARA is, but not sure). they probably have mostly Nokia folks in them, as does Jolla (speaking of, looks like they are about to announce a bigger phone: see countdown clock  on )
  • Thank you Daniel. I always had a hard time arguing with those people who couldn't get over the past.
  • While I TOTALLY agree, Daniel, I think it was unwise for Nokia to make this announcement. They gain nothing by making the announcement, but lose some of the brand loyalty by saying it in public. Now people that are Nokia loyalist can let the divorce sink in and start looking for a new love. 
    Its no different than your girlfriend you break up with. You pine away awhile, but as soon as you see her with another guy/girl, you get the tattoo covered and start sleeping with everything in town, and ignoring anything that reminds you of her. 
    I'd have let the fandom and dreams smolder. It was the mystique that keeps their brand relevant, and valued. Now people see they may license it to anyone, like Pantech or Huawei. No one wants that, and if its going to the highest bidder, no one will take notice.
    Nokia stands for something, and not just in name. If they don't license it to a company that can add value, it will be even worse a mistake, and this announcement just made that possibility seed in the minds of the fans. 
    What do you think about my perspective? (disclaimer: I'm a Nokia loyalist since 2005)
  • Those are just people with wet dreams of Android mating with the Nokia logo, playing in dome sort of tech porn fantasy, in their heads. There may be a phone with Nokia's logo at some point, but it wont be "official", and we know how people live that word, around here. :)
  • If Nokia is willing to license their brand name in the future, then why didn't Microsoft license it for, let's say, ten years?
  • They actually did with all non-Lumia lines such as Asha, S40 and X.
  • Aren't all those lines being discontinued with immediate effect since the MS restructuring?
  • Yet still many people think Nokia would fare well by going into Android instead. i always tell them to have a look at HTC's finances.
  • Yes look at the finances...and HTC still has its brand name intact on hardware. Where is this HTC doom n gloom coming from? Oh...old news, like some claim some cant get over that past about Nokia and its time to embrace the new Nokia...
  • I'm wondering if the "let it go" was a SO to Frozen lol
  • Agree. For now, as difficult as it may sound, let the rumors rest in piece. Posted via the Windows Phone Central App for Android
  • Right after Sony starts developing a Walkman that successfully beats an iPod.
  • And after Shamesung stops acting like a bitch...
  • Well seeing as ipod sales are more niche customers it could happen
  • Not surprised
  • Now, will those Android fans STFU...
  • But they did say a Nokia branded "something" was coming out this quarter...
  • Could easily be a wearable. Or even software...
  • I suppose it could be anything, even a sports drink, but I'm inclined to agree with wearable, given their stated interest in the IoT.
  • Nokia power. With zero calories.
  • Did they, in that event? Well, they are supposed to say somethin gon Monday.
  • Ramzi Haidamus, President, Nokia Technologies, said something about a branded device coming out "this quarter" during his Q&A...
  • Cool. Hopefully we'll be wiser on Monday then. Hope it is not JUST the brand they have lisenced (like they did with TVs in the past) but a product that actually has some Nokia tech/IP/design in it.
  • Maybe lte modems?
  • Ok, I listened to Haidamus again. What he said was not in the Q&A, but rather during his regular comments. What he said was that Nokia "branding" would start this quarter. Exactly what that means, I guess we will have to wait and see....
  • Ok, thanks for checking! Heh, knowing how Nokia likes to hype things up and then reveal almost nothing, and their back and forths on brands/product names, would not be surprised if they would announce on Monday that HERE will be rebranded to... wait for it... "Nokia HERE!" :D
  • They are getting into wearables market..going to make diapers
  • Nokia Denim diapers, latest fashion lol
  • Daniel... Nokia changed to Nokia Networks in India... They made a contract with Airtel mobile carrier...
  • What contract exactly? That doesn't mean they're going to make phones again, they're still in the telecommunications business after all.
  • When did that happen?
  • Nope... Nokia Networks is a different...  branch(?) of Nokia.. Basically it is NSN or siemens accquisition by Nokia...