– Harsh competition –
A senior analyst at Nordea Markets, Sami Sarkamies, told AFP that Nokia “could only win” with the deal.
“Certainly Nokia’s brand still has some appeal in some markets, but competition is harsh. However, Nokia won’t bear any of the risks,” Sarkamies said, estimating the extra revenues would be counted in tens, not hundreds, of millions of Euros.
The risks instead fall on Chinese FoxConn, which will be in charge of manufacturing, sales and distribution of the new products through its subsidiary FIH.
As for Microsoft, the deal could mean the end of its short-lived venture into Smartphones.
“The deal again highlights Microsoft’s continued failure in mobile. Its Smartphone future is up in the air,” IHS Technology wrote in its analysis.
IHS said the new Nokia-branded devices were more likely to succeed in emerging markets.
“The Nokia brand is very strong in certain markets too and HMD will likely target these emerging markets instead of the already saturated developed markets,” it estimated.
HMD is to be led by Finn Arto Nummela who has previously held senior positions both at Nokia and Microsoft.
The conditional deal between Microsoft and Nokia’s new brand-licensing partners is expected to close in the second half of 2016.
Nokia’s share advanced 2.91 percent to close at 4.67 Euros on the Helsinki stock exchange.
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