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'HMD to have full operational control over Nokia branded devices'

"Nokia has made no investment in HMD and will hold no equity. Nokia will have no-one in the business and no-one will transfer from Nokia to HMD."

, ET Bureau|
Last Updated: May 30, 2016, 09.47 AM IST|Original: May 30, 2016, 09.42 AM IST
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Senior executives from Microsoft will move to HMD Global to bring back to life the Nokia brand, one of the most recognised brands in the world and the most remembered in the mobile phone space. Spokespeople from Nokia and HMD told ET over emails that HMD, the newly formed company in Finland, will have full operational control on design, branding, sales and marketing of Nokia-branded devices, but has kept the launch plans under wraps - until deals between Microsoft, Foxconn and HMD conclude in second half of the year. Edited excerpts:

What is the thinking behind Nokia re-entering the mobile devices market? Is it an admission that the previous decision to sell the business to Microsoft was a mistake?
Nokia is not re-entering the mobile devices market, rather we have signed a strategic agreement with HMD global Oy which will see it launch a range of Nokia branded feature phones, smartphones and tablets.

What happens to Nokia facility in Chennai? Are talks on between HMD, or Foxconn, and Nokia to acquire the latter's phone manufacturing plant in Chennai, India once the freeze is lifted?
This agreement has no impact on the facility in Chennai, and we have nothing new to add regarding that matter.

Will Nokia be able to bring its mobile phones and tablets to India this year?
HMD will be responsible for creating and launching devices. HMD will be responsible for decisions on which markets it wishes to target; Nokia is not involved on those decisions.

What will Nokia gain from the deal, financially, apart from the royalties from HMD?
In addition to royalties, we expect that the products which HMD will create will help to keep the Nokia brand exciting for consumers around the world. Nokia-branded feature phones remain one of the most popular choices of mobile phone in many markets around the world today.

Will Nokia/HMD decide on the number of phones HMD /Foxconn will make? If so, will it be on an annual basis or quarterly?
Absolutely not. Nokia has no control over such decisions, the agreement is for brand and intellectual property licensing. Nokia will receive royalties for each device sold and, of course, we hope that they will be extremely popular and sell well.

HMD will have full operational control of design, branding, sales and marketing of Nokia-branded devices. We (HMD) are not going into all the details at this point – there will be more announcements to come.

Who will do the marketing and distribution of the Nokia phones in India? And who will do so in other markets like Africa or South Asia?
HMD global Oy is responsible for marketing globally and FIH for distribution.

How much has Nokia invested in HMD?
Nokia has made no investment in HMD and will hold no equity. Nokia will have no-one in the business and no-one will transfer from Nokia to HMD.

When do the first phones or tablets come out from HMD under the Nokia brand? Will HMD be able to bring its Nokia brand mobile phones and tablets to India this year?
HMD has not set out its timetable or product roadmap yet, but will be making announcements in due course. The various transactions will first have to close in H2 this year. The brand has huge resonance and affinity around the world, particularly in India, and we are grateful for the support Indian consumers have given the Nokia brand over the years. HMD will begin operations selling its existing range of Nokia feature phones. It will also start developing a new smartphone portfolio and make further product announcements as it builds towards launch. HMD has committed to building future Nokia-branded smartphones and tablets on Android, uniting one of the world’s iconic mobile brands with its leading operating system and app development community.

Who will HMD appoint for marketing and distribution of the Nokia phones in India, and other markets like Africa or South Asia? We understand that top executives from Microsoft's devices team in India, including head Ajey Mehta, and sales and marketing staff would be moving to HMD in India.
We expect the announced transactions to close in H2 2016. Further announcements about specific operations, personnel and activities in each geography will follow in due course.

What kind of an upside does HMD see for feature phones in India? And for smartphones given that the market is witnessing a decline or plateauing effect since the last few months?
The smartphone market has grown extremely quickly over the past 10 years and is now worth more than USD 300 billion per year. Although mobile phone technology has in large part commoditized and the market has naturally slowed, we believe there is a significant opportunity to differentiate with branding and distribution. Nokia remains one of the most recognized brands in the world and is recognized by 95% of mobile users, and we believe that if we create great products people will want to use them.

How many people will HMD have in mobile phone and tablet business in a year? How many of them will be in India?
We expect the announced transactions to close in H2 2016. Further announcements specific to each geography will follow in due course.

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