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2016-05-18

NOKIA: Nokia signs strategic brand and intellectual property licensing agreement enabling HMD global to create new generation of Nokia-branded mobile phones and

Nokia Corporation

Stock Exchange Release
May 18, 2016 at 12:05 (CET +1)

Nokia signs strategic brand and intellectual property licensing agreement
enabling HMD global to create new generation of Nokia-branded mobile phones
and tablets

Espoo, Finland
- 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."

1Excluding 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 control...

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