Nokia to Return to Cellphones Via Licensing Pact -- Update

By Matthias Verbergt 

Nokia Corp., the Finnish company that once dominated the cellphone industry, will again stick its badge on mobile handsets.

The company, which has refashioned itself into a maker of wireless and Internet network equipment, won't make or sell cellphones and tablets directly. Rather, Nokia said Wednesday that it has entered a series of licensing pacts with Finnish and Asian partners.

Nokia said it has granted patent and design rights to a newly created company based in Finland, HMD Global Oy, which will be in charge of global marketing through a 10-year exclusive agreement. On the manufacturing front, Nokia said it has signed agreements with Foxconn Technology Group, the Taiwanese company and main assembler of Apple Inc's iPhones.

As part of a separate but related transaction, Microsoft said it has agreed to sell Nokia's former entry-level phone business, which it has owned since 2014, to HMD and Foxconn for $350 million. Two years ago, the U.S. company spent EUR5.4 billion ($6.1 billion) to acquire Nokia's wireless device assets.

Nokia said revenue from the entry-level phone operations would help HMD finance a $500 million investment in a global marketing campaign over the next three years.

Wednesday's announcement marks Nokia's second step toward a return to the consumer products arena in weeks. Last month, the company said it planned to buy Withings SA, a French startup that was among the first companies to make Internet-connected devices that track users' health.

Write to Matthias Verbergt at [e-mail]

(END) Dow Jones Newswires

May 18, 2016 08:30 ET (12:30 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.