Nokia lays groundwork for re-entry into consumer devices

Nokia (NYSE:NOKIA) won't be jumping back into the smartphone business until the fourth quarter of 2016 at the earliest, but it is already preparing for its re-entry by hiring software experts, testing new products and looking for sales partners, according to a Reuters report.

Late last month, Nokia unveiled the Ozo virtual reality camera, which followed the January introduction of the Android-based N1 tablet. "This is the rebirth of Nokia, which we have seen so many times in its 150-year history," Ramzi Haidamus, president of Nokia Technologies' Silicon Valley-based unit, said during the introduction of the Ozo, according to the Financial Times.

Nokia Technologies, which researches new technologies and handles the company's patent-licensing business, has advertised dozens of jobs in California on LinkedIn, Reuters noted. Many of the open jobs are in product development, including Android engineers.

Nokia had planned to cut 70 jobs from the 600-person technology division, but an unnamed source told Reuters that the figure had since been halved. Nokia has said that some of its staff from the unit are working on designs for new consumer products, including phones, as well as in digital video and healthcare, the report said.

Nokia maintains one of the largest patent troves in the mobile and technology industries and will get an influx of talent and patents if it completes its $17.1 billion (€15.6 billion) acquisition of rival network gear vendor Alcatel-Lucent (NYSE: ALU). That's because Nokia will also be taking on research and development from Bell Labs.

Meanwhile, Nokia is working to find brand-licensing partners that will use Nokia's technology, designs and brand but manufacture, market and sell the gadgets. Those deals will be less profitable but also less risky than first-party manufacturing. Nokia said last month it is focused on "identifying a partner that can be responsible for all of the manufacturing, sales, marketing and customer support for a product."

"If and when we find a world-class partner who can take on those responsibilities, we would work closely with them to guide the design and technology differentiation, as we did with the Nokia N1 Android tablet," Nokia Technologies spokesman Robert Morlino said in a statement on Nokia's website. "That's the only way the bar would be met for a mobile device we'd be proud to have bear the Nokia brand, and that people will love to buy."

"They want to be innovative and seen as a company with long-term vision in the [tech] industry and having a foot in devices plays into this impression, even if it's not bringing massive revenue at the outset," Gartner analyst Sylvain Fabre told Reuters.

Nokia will also face challenges from fast-moving smartphone competitors like Xiaomi and will have to overcome the hits the Nokia brand has taken since the company's downfall as the world's leading handset maker.

"A brand is quickly forgotten if it is absent from the consumer business," former Nokia executive Anssi Vanjoki, now a professor at Finland's Lappeenranta University of Technology, told Reuters. "The brand will not help much if the product is similar to what is already being sold out there. But if there is something new and interesting to it, the old heritage may be helpful."

For more:
- see this Reuters article

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