Nokia to return as smartphone brand

The Nokia brand is set to return to smartphones, two years after the Finnish company sold its flagship handset business and walked away defeated by Apple Inc and Samsung Electronics. Nokia Oyj said Wednesday it will license its brand to a Helsinki-based company run by former Nokia managers, HMD Global Oy, which plans investments topping $500 million to bring mobile phones and tablets to the market.

Nokia won't have a financial stake in the venture, though it's set to collect fees from brand licencing and intellectual property. The comeback effort is a bet that shoppers will remember and embrace a brand that almost disappeared with the sale of Nokia's handset unit to Microsoft Corp. in 2014. Nokia, which once dominated global smartphone sales, gets a risk-free second chance at a business that was crushed by Apple's iPhone and Google's Android software introduced in 2007.

"It's going to take more than a well-known brand name in this competitive market," said Annette Zimmermann, an smartphone analyst at research firm Gartner in Germany. "To shake up the market and offer something that excites the fickle market will be difficult."

HMD is funded by a group of international private-equity backers through a fund called Smart Connect LP, as well as by HMD's management team. The venture will be run by Arto Nummela, a former Nokia manager and current head of Microsoft's Mobile Devices business for Asia, Middle East and Africa and its business making inexpensive, so-called feature-phones. Florian Seiche, also a former Nokia executive and current Microsoft manager, will be president at HMD. The HMD executives declined requests to be interviewed.

The venture will make smartphones running Android, and also plans tablets and feature phones. FIH Mobile, part of Foxconn Technology Group, will help to build the devices.

HMD will be in charge of designing, making and selling the devices, said Ramzi Haidamus, president of Nokia's IP-licensing business. While Nokia doesn't have a financial stake, it will make sure the firm follows broad product guidelines, he said. He declined to comment on what types of phones would be made or in which markets they would be sold. Nokia didn't give details of the licensing pact.