Nokia Corporation (ADR) (NYSE:NOK)’s Decision To Reenter Mobile Market Will Have To Go Through The Test Of Time


Nokia Corporation (ADR) (NYSE:NOK) is returning to mobile market, after initially inking a deal with Foxconn to make tablets. However, it seems the Nokia won’t adopt its past strategy in consumer hardware business.

When Nokia signed a buyout deal with Microsoft Corporation (NASDAQ:NOK) that saw it sell its handsets business, the company was prevented from turning to mobile business until the end of 2016. However, in a recent update, Nokia appears to have found what many would call a loophole to skirt Microsoft deal restriction.

Skirting restriction

The company said that its return to mobile devices business is complicated at best, but it could still find partners to support its re-entry into the space. To avoid friction with Microsoft because of the deal they signed, Nokia can enter a brand licensing deal with a partner that will be responsible for manufacturing and sales of mobile on its behalf.

On the tablet front, Nokia Corporation (ADR) (NYSE:NOK) has already found a partner – Foxconn. Through Foxconn, Nokia came up with the N1 tablet a low-priced device.

Cautious return to mobile

However, Nokia’s leadership has clearly been guarded on the issue of returning to mobile hardware. In a recent investor update, the company’s CEO, Rajeev Suri, sought to clarify that Nokia is not seeking a full-fledged return to direct consumer mobile hardware business per se, at least not now.

Expanding N1 market

On the issue of Nokia’s tablet dealing with Foxconn, there have not been sales updates from any of the parties. However, Nokia earlier on said that the reception of N1 tablet was favorable. It is possible that Nokia and Foxconn could expand the availability of N1 beyond China and bring it to other Asian markets.

Nokia may not be necessarily out to make big fronts from N1, but it will certainly be able to retain its brand presence in consumer hardware space.

Complicated path back to mobile

While it is almost certain that Nokia Corporation (ADR) (NYSE:NOK) is poised to return to consumers handsets business one way or the other, many questions abound. It will be interesting to see how the company tackles the duopoly of Apple Inc. (NASDAQ:AAPL)’s iOS and Google Inc (NASDAQ:GOOGL)’s Android. If the company chooses to join the popular Android platform, the company will be entering a very crowded market. Stakes are really high for Nokia in its return to consumer mobile devices.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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