Nokia: No Plans To Return To Phone Manufacturing - InformationWeek

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4/27/2015
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Nokia: No Plans To Return To Phone Manufacturing

Despite rumors to the contrary, Nokia has no official plans to re-enter the mobile phone manufacturing market, the company officially stated.

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Mobile phone manufacturer Nokia officially debunked rumors that it is planning a return to manufacture or sell consumer handsets by issuing an official statement on the company's website on Sunday, April 26.

The response followed a serious of rumors that Nokia, a once ubiquitous presence in the mobile phone market, was plotting a return to the market -- which is forbidden until 2016 as part of Microsoft's acquisition deal.

"Nokia notes recent news reports claiming the company communicated an intention to manufacture consumer handsets out of a R&D facility in China. These reports are false, and include comments incorrectly attributed to a Nokia Networks executive," the statement reads. "Nokia reiterates it currently has no plans to manufacture or sell consumer handsets."

While the company flatly denied it was currently planning any manufacturing, Nokia is still putting out Nokia-branded devices into the market, most notably with the launch of a brand-licensed tablet computer in China, which runs on Google's Android platform.

Nokia's N1 tablet, released in 2014.

Nokia's N1 tablet, released in 2014.

The story of Nokia returning to phone manufacturing started with a report from Re/Code that claimed the company would return to the market in 2016 thanks to its Nokia Technologies division. This part of the company had been responsible for the N1 tablet released in 2014.

Microsoft announced plans to acquire the Finnish company in September 2013, when the software giant absorbed substantially all of Nokia’s devices and services business, including the mobile phones and smart devices business units, the company's design team, operations including all Nokia devices and services-related production facilities, and all the related sales and marketing activities and support functions.

The $7 billion deal, which closed about a year ago, has not been a resounding success. Microsoft languishes in third place, behind Google Android smartphones and the Apple iPhone, with just 3.4% marketshare, according to a report released earlier this month by IT analytics firm comScore.

Android ranked as the top smartphone platform in February 2015 with 52.8% marketshare, up 0.2% from November, followed by Apple with 41.7%, and then Microsoft, which saw just a 0.1% uptick in users.

In an interview with PCWorld, Ben Wood, chief of research at CCS Insight, warned that Microsoft needs to step up its game and capture at least 10% of marketshare to be seen as viable -- a lack of apps has been a critical issue for user adoption.

"In our forecasts we don't see anywhere near that level in the next three years, which underlines the scale of the challenge Microsoft faces," Wood explained.

One possible inroad Microsoft could follow involves mobile payment -- according to a survey by 451 Research, 5% of Windows Phone users looking to employ mobile payments within the next 90 days.

[Read about the latest Windows 10 for Phones update.]

A lot is riding on Microsoft's release of Windows 10 this summer. The company has been coy with details, but said the update would offer a slate of universal apps, including Office, and connectivity with the Xbox video game console.

Interop Las Vegas, taking place April 27-May 1 at Mandalay Bay Resort, is the leading independent technology conference and expo series dedicated to providing technology professionals the unbiased information they need to thrive as new technologies transform the enterprise. IT Pros come to Interop to see the future of technology, the outlook for IT, and the possibilities of what it means to be in IT.

Nathan Eddy is a freelance writer for InformationWeek. He has written for Popular Mechanics, Sales & Marketing Management Magazine, FierceMarkets, and CRN, among others. In 2012 he made his first documentary film, The Absent Column. He currently lives in Berlin. View Full Bio

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H@mmy
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[email protected],
User Rank: Ninja
4/28/2015 | 4:52:59 PM
Re: Brand licensing
Here in my region Nokia phones are still very popular. Nokia is considered to be most reliable brand here. I feell that Nokia has not lost market yet. If Nokia returns to phone manufacturing they will definitely have users.
Brian.Dean
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Brian.Dean,
User Rank: Ninja
4/28/2015 | 4:36:26 AM
Re: Brand licensing
Hypnotically speaking, Nokia just needs to shrink the screen size of the N1 by around 2 inches and add the functionality of a Sim Slot. Name it the N2 and launch it into the market in 2016 -- Nokia is again in the phone business.

 
Brian.Dean
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Brian.Dean,
User Rank: Ninja
4/28/2015 | 4:10:15 AM
Re: The writting was on the wall
@melgross, I feel that you are right. The only possible scenario that comes to mind for a favorable mobile Windows 10 platform is if mobile hardware has reached a point at which a fully functioning Windows can be booted.

ASUS showcased their Zenfone 2 at the CES 2015, the phone has a quad-core Intel Atom processor and 4GB of ram -- mobile hardware is progressing. But, I don't think that even these specs would work well for a fully functioning Windows.
Angelfuego
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Angelfuego,
User Rank: Ninja
4/27/2015 | 7:21:46 PM
Re: The writting was on the wall
Thanks for clearing that up. I heard rumors that Nokia was going to make a comeback by bringing back sidekicks. Always wanted a sidekick, but never purchased one while they were a hot commodity. Needless to say, I was looking forward to that. I am sad to hear that Nokia doesn't have any plans to manufacture phones ever again. Their phones were pretty sturdy and came in a variety of colors.
melgross
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melgross,
User Rank: Ninja
4/27/2015 | 6:49:52 PM
Re: The writting was on the wall
Will Win Phone 10 make much of a difference? Likely about as much as Win Phone 8 did, which was nothing. The same things were being said about that. It was supposed to be a game changer. People simply don't like Win Phone. That's it! There's not much that Microsoft can do about it, because the things that aren't liked are the very things that set it apart.
H@mmy
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[email protected],
User Rank: Ninja
4/27/2015 | 4:09:42 PM
Brand licensing
Nokia said it is looking into returning to the smartphones business by brand-licensing.Nokia sold its phone business to Microsoft  but just months after that it launched a new brand-licensed tablet computer, produced under license by Taiwan's Foxconn, with an intention to follow up with more devices.
asksqn
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asksqn,
User Rank: Ninja
4/27/2015 | 2:33:09 PM
Tell me another one
After Nokia's infamous MITM attack on HTTPS traffic on the Asha 302 in 2013, I have to wonder just who Nokia thinks it is fooling by leaking select intel that it may perhaps be manufacturing phones again?  Not that the MS takeover is all that better - the same if not similiar crap will be perpetrated on consumers except under a different trademarked logo.
mejiac
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mejiac,
User Rank: Ninja
4/27/2015 | 2:18:36 PM
The writting was on the wall
When Microsoft acquired Nokia, there was a lot of hype and enthusiasm amoung the tech community. I personally thought it was a good strategic move. But sadly Microsoft has not been able to turn it around to make headlines, but has since only been to be in a distant third place (and sadly I think this is because there simply isn't a fouth OS available to be compared with).

As clearly mentioned in the article, Microsoft has a lot riding on Windows 10. I've been using the preview and I truly like what I'm seeing. But I'm not sure if this spells "success" regarding smartphones. There are way to many apps still missing for the main core of consumers to even consider a windows phone as a option (currently because of it's price point and entry level models it has a certain appeal).

Microsoft may have a game changer once Windows 10 is available, and let's hope this drives developers and companies to both reconsider and hope on board in providing apps to Windows Phones.

If we think about it, Microsoft has many unique features that developers can tapp into (Xbox, Home Theater PCs, etc)... not sure why Microsoft hasn't highlighted this.
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