Nokia’s Low-risk Approach To Mobile Devices

Nokia's Low-risk & Mobile Devices

Nokia's Low-risk & Mobile DevicesEven though Nokia built new plants to manufacture smartphones again, it would need to wait until next year, when a non-compete agreement with Microsoft expires. However on the strength of Nokia’s recent moves in the mobile space, it’s not likely to follow that path.

Late last year, Nokia licensed its brand to Foxconn for the N1 Android tablet. Though Nokia designed the device, Foxconn manufactured and marketed the device, when Nokia earned the license fees. This was a low-risk, low-reward strategy, because Foxconn took all the overhead risks and retained most of the revenues. This partnership fueled speculation that Nokia might sell new phones under the same licensing model as early as next year. If it does so, those licensing revenues will flow into its smaller Nokia Technologies division, which posted 7% sales growth last quarter.

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