Nokia teams with HMD to launch Android phones starting next year

HMD will design the smartphones that will be produced by Foxconn under terms of the 10-year deal.

Nokia confirmed that it will return to the smartphone business next year, saying its branding and licensing deal with HMD Global Oy “has come into force.”

HMD Global will develop Nokia-branded smartphones powered by Android beginning in the first half of 2017 alongside Nokia-branded feature phones. Microsoft sold its feature-phone business earlier this year to HMD and FIH Mobile, a subsidiary of the Taiwan-based electronics giant Foxconn.

HMD was founded earlier this year and—like Nokia—is based in Finland. Nokia isn’t a shareholder in HMD, but some of its former executives have leadership roles at the new company.

“We’ve been overwhelmed by the enthusiasm shown around the world for the return of the Nokia brand to smartphones,” Brad Rodrigues, interim president of Nokia Technologies, said in a press release. “The HMD Global team has the ambition, talent and resources to bring a new generation of Nokia-branded phones to market, and we wish them every success.”

HMD will design the smartphones that will be produced by Foxconn under terms of the 10-year deal. HMD said it has already established “a significant global foothold” with feature phones in worldwide markets including the Americas, Europe, Asia, the Middle East, Africa, India and China.

HMD recently hired former Rovio CEO Pekka Rantala as chief marketing officer and plans to spend $500 million to market Nokia-branded phones and tablets over the next three years. Rantala had previously served as senior vice president of global marketing at Nokia.

“We believe that the time is right for renewal in the mobile industry,” said Florian Seiche, president of HMD Global, in a company statement. “The market is fatigued and flooded with undifferentiated products. Consumers are looking for technology with clear purpose that is useful, exciting and with a brand they can trust, so our approach will focus on true, core user experiences and a dedication to quality.”

It’s far from clear whether Nokia and HMD can elbow their way into an extremely competitive market where margins are frequently razor-thin. Samsung and Apple dominate the top end of the market, while a host of Chinese vendors including Huawei, Oppo and Vivo continue to gain ground, primarily with more affordable devices. Meanwhile, formerly major players such as HTC and Lenovo are struggling to carve out a meaningful share of the market.