Ah The News We've All Waited For - Nokia Is Returning To Smartphones. Nokia China President Mike Wang Confirms to Chinese Press. And yeah, obviously they will be Android smartphones - UPDATED: Nokia Denies (on a Sunday?)

Ah yes! This is THE news we've been waiting for. Nokia will return to smartphones. I can die happy.


UPDATE 26 Apr 2015 - two days after the story broke and as lots of sites started to report the story, Nokia has on 26 Apr - yes on a Sunday - officially denied this matter and Nokia.com has a clear statement "These reports are false, and include comments incorrectly attributed to a Nokia Networks executive.. Nokia reiterates it currently has no plans to manufacture or sell consumer handsets." Read the whole (short) statement here. Please note that 'currently has no plans' does not mean 'will never' and the end of 2016 is still far away... (and to quote BBC TV comedy series Yes Minister/Yes Prime Minister, 'never believe anything that is not first officially denied' haha..). But yeah. Lets calm down for now, Nokia clearly wants to move slowly (if at all) in this instance. The rest of this blog is as I wrote it on Friday 24 Apr when the news broke, and we may well want to return to this blog in coming months and about a year or so from now...


So yeah, its now reported in many Western media sources that MIke Wang the President of Nokia in China told Chinese press that Nokia will set up an R&D facility in Sichuan (South-Central China, regional capital city is Chengdu) which will support the upcoming Nokia smartphone production. And the press stories say Nokias new smartphones will ship in 2016. Thats almost day-after-tomorrow in handset years (vs human years, dog years, internet years). This is awesome news for us fans of mobile phones. And great for competition and for good consumer experiences and for innovation. 

Well, what should we expect? The early Nokia re-entry will not be huge scale. Nokia has to grow its total handset operation from handset model line to factory production (initially probably outsourced but also probably soon produced in Nokia-owned factories if the project goes well). The ramp-up stage will be done 'sensibly' as opposed to 'the Elop way' haha, so OBVIOUSLY the first Nokia re-entry smartphone will be the new flagship, not how Elop tried on a mid-range phone with the underwhelming Lumia 800. The premium flagship will address a huge pent-up demand of fans of 'real' Nokia not the Lumia Windows Phone rubbish and those buyers will pony up a premium price. Nokia is very smart at marketing, they will know to price the first flagship on a profit-skimming strategy when the demand is big, but also to feed those customers with may 'ooh-aah' features and gorgeous design - just check out the Nokia N1 tablet or the last non-Elop designed smartphones, the MeeGo based N9 and N950.

Nokia knows fully well where the real market is - starting with China (duh!) not the USA - and the first Nokia re-entry flagship will be designed for Emerging World but affluent customers. Expect removable battery, miroSD card slot and all the goodies, of course stuffed full with high tech from NFC to 4G to wireless chargiing to yes, of course the Pureview camera tech. The first Nokia re-entry smartphone flagship is by far the favorite to win the 'phone of year' awards, they've now waited so long to do it 'right'.

Expect the first flagship to be an iPhone-clone in slab form factor, but with Nokia-distinctive design. I would expect it to totally differentiate from Lumia ie not the cheerful neon plastic colors. Something 'serious' and 'expensive' in materials and look and feel. Obviously it will run Android which is total death to the last remnants of the Lumia Windows Phone business at Microsoft. And Sony, Samsung, LG and Lenovo-Motorola better hurry in 2015 to try to build loyalty at the top of the Android pyramid, next year they all will be easily toppled. Nokia's 2016 sales will be limited by capacity to produce and ship not by demand.

Soon after the initial flagship we'll see two sister products. A premium mid-price 'little sister' phone, slightly lesser specs and lower price but still in the premium smartphone segment. And then the follow-up to the iconic Communicator line. Again, something Nokia staff begged Elop to allow but the idiot CEO overrode his staff. Now we'll finally get the flagship-spec QWERTY executive phone, which will be the most advanced phone of its year, like the E90 Communicator, the E7 and the N950. And with a price to match. That phone is likely even to be branded 'Communicator' and it will be a technology showcase of 'everything including the kitchen sink' principle but ignoring the silly race for supermodel-slim phones. This will be the thickest, fattest smartphone we've seen in several years. But we will drool to want it, and will fork over the cash to buy it too. It will be the phone all telecoms bosses will proudly exhibit as the 'better than iPhone' model that all carrier CEO execs want. Who cares what it costs. Nokia prices it obscenely, ships only limited numbers of it, and makes a nice profit on it.

In the first 12 months, Nokia probably only gets to a run-rate of about 25 million smartphones per year, by the fourth quarter since launch (about 6.25 million level at that time or a bit over 1% market share that quarter). But this will continue to grow and be about double that in the second year and reach a run-rate of around 80 million by the third year (2018 and beyond) which is at 4% market share by the 12th quarter of sales. The growth will continue rather easily and Nokia's main issue is to manage profitability and expansion of capacity and by the turn of the decade Nokia will be around 10% market share still growing. But Nokia's 'native' market share without the Windows Phone baggage today is something in the 15% range or Apple iPhone size haha. Now Nokia can't sell 225 million Nokia branded smartphones costing 600 dollars or more (unsubsidised price) but at that kind of levels Nokia's ASP would be somewhere around 150 dollars, but this would be a very profitable fast-growing business, if Nokia wanted it. Nokia selling 225 million smartphones at 150 dollars average sales price means 34 Billion dollars of annual revenues! That is what is for Nokia to take without breaking a sweat.

If Nokia wants to move more slowly, and skim more of the profit, it can. If Nokia wanted to go beyond this, and really drive for number 1 again, passing not just Apple but Samsung - then yes, that is also within reac, once Nokia is back, its distribution is back, its manufacturing, sourcing etc is back. And here - remember, Nokia KNEW this but Elop ignored it and actually worked to harm it - Nokia's huge strength just four years ago was its world-best carrier relationships. Rajeev Suri the new Nokia CEO can easily tell any carrier CEO that Elop the cancer is gone, Windows Phone is gone, and Nokia returns to serving CARRIER NEEDS first. Something Samsung (and now even Google) have failed to do. Note the acquisition of Alcatel-Lucent is perfectly in line with Nokia serving... carrier needs! The market is waiting to be grabbed by Nokia.

The end-user customers never deserted Nokia. In the four most populous continents, Asia, Africa, Latin America and Europe, Nokia was the bestselling smartphone in 2010 and still in 2014, Nokia was the bestselling or second-bestselling PHONE. Because of Windows Phone, the distribution channel pushed premium customers to Samsung, Huawei, LG etc. But the customers want Nokia. They keep buying Nokia (even as its now owned by Microsoft). When the 'real' Nokia returns - on Android - the retail channel will love it and the full power of Nokia loyalty will be felt. As long as Nokia then delivers high quality phones, that are essentially bullet-proof (you know the story where the dog ate the Nokia phone and later pooped it out, and that phone still worked...)

The growth path for Nokia smartphone recovery and return is 'easy' and the rate and level for several years will be up to Nokia and Nokia only. Every quarter for at least two years we will hear that the channel wanted more phones than Nokia could deliver. What Nokia always delivered were phones that end-users loved and carriers loved to sell. Nokia's big problems in 2009 and 2010 were DELIVERY issues and slipping schedules (and some software issues, but now Google handles the OS). But most Nokia generations of phones were award-winners year out and year in.

And yeah. Am willing to call it right now before we know ANYTHING official about what or how, Nokia will give us more than one smartphone model, it will grow fast. in the first year Nokia passes Blackberry. In the second year it passes Lumia (if that still exists). By the third year Nokia RETURNS TO THE TOP 10. And every quarter of those first 12 quarters, 36 months, Nokia smartphone business will report a healthy profit.4% markets share is where LG and ZTE are today, or where Lenovo would be without its Motorola acquisition and obviously that is well bigger than Sony Xpera today. This is the minimum level I promise you Nokia will do 'with its hands tied behind its back' and blindfolded haha.

So WELCOME BACK NOKIA. We have missed you and we will cherish you and support you. Now please make sure we fall in love with your first re-entry smartphones in ways like we loved the N93 and N95 and E90 Communicator and N8 and E7 and N9 and 808 Pureview etc.

Comments

[Jerry]

That is really great news! My next phone will be a Nokia Android!

[zlutor]

@Tomi: you have written how Nokia could win. What about how they can fail? :D

If they go for phones does selling Here - OMG, what a name... - still make sense?
Or they sell it just because of money used buying ALu?
Having their phones, maps/location business and networks - meaning nice e2e capabilities again - would be something no competitor can match ATM...

[E.Casais]

Tomi,

Sorry to put a damper on your understandable enthusiasm. Assuming Nokia really wants to return to producing mobile phones, what competencies remain internally to pull it off?

Nokia had great people in production and logistics; gone, as manufacturing plants closed. My understanding is that phone design has largely been transferred to Microsoft in the USA, and practically everything that had to do with software is gone, the remaining people redirected to Windows Phone OS. Several people in the Pureview team have left. There is a considerable loss of skills and organizational knowledge throughout.

I suspect that if Nokia re-enters the mobile phone market, its first series of products will be somewhat disappointing -- wannabe items without an overwhelming competitive edge, probably without the Nokia build quality of yore, as production will be entirely outsourced.

And what does it mean that Nokia can't even take advantage of its mapping unit to provide something novel for devices, as it is rumoured to divest it?

[Catriona]

I think you are being too enthusiastic, Tomi. Samsung has a stranglehold on the high-end Android market, and Nokia's brand is damaged goods. They are basically begging Apple to take their Maps unit for $3.2 billion (remember they paid $8 billion for it). That doesn't sound like a company ready yet to jump back into the top 5, much less pass up Samsung and Apple. Remember, Apple had Steve Jobs, who had already built up a strong ecosystem, and then struck gold with a hit like the world had never seen before (and likely won't see again for quite some time). Building a better phone doesn't differentiate much anymore.

[Antonio Baron]

Great news! We miss Nokia quality, innovation and unique features!!

Question: I've read most of your posts in the past 3-4 years and agree 100% with your analysis of Nokia's downfall due to poor management.

BUT: What do you think would have happened to Nokia WITHOUT Elop and where would Nokia be today?

I hope you'll write a long post about this issue.

[Antonio Baron]

To Catriona

I disagree. Nokia still has a fantastic strong brand name worldwide to build the return upon. Everybody knows it and a great many love the brand to this day. Perhaps the smartphone market is also a bit boring these days and ready for some exiting news for once. The strength of Apple is mainly built by a strong brand and marketing. A new Steve Jobs is not needed to succeed and neither is a product as revolutionary as the Iphone was 1997. That will never happen again.

[RottenApple]

@Catriona:

I'll say the same as I said about similar remarks from Baron 95 and Leebase:

As Americans you will probably never understand what Nokia means in some other parts of the world. Just think Apple and you are getting close.

@Antonio Baron:

iPhone in 1997? Man, I must see that thing... :D

[Crun Kykd]

Nice that Nokia is looking to get back in. Consumers always benefit from more competitors. But I think we can't go back to the past. What once defined a smartphone has now changed completely into a portable computer. The basis of competition will be an entirely different set of features commensurate with the advances of a decade's worth of technology progress since Nokia last participated.

Phonecalls? Web browsing? Good cameras? These are table stakes for any common smartphone. The new metrics will be strong sensors, VR displays, haptic IO, flexible radio networking (SDR), and loyal developers w/good SDKs. Not clear to me that these were ever core competencies of Nokia's vaunted research labs of old. Has the tiger grown new spots?

[Maggan]

Such enthusiasm for a product you haven't seen yet! Almost at iShee ... sorry ... Almost at dedicated Apple fan levels.

It will be interesting to see if Nokia can stage a comeback.if they do I think Apple and Samsung will be greatly relieved, since that would show that it is possible to survive and get back in the game even after a few blunders.

/Maggan

[Catriona]

@RottenApple, but it's been 4 years since Nokia's collapse. That's a long time, and Nokia would be just another Android OEM. Why get a Nokia when you know Samsung is going to be just as good or better? Samsung has the kind of vertical integration that Nokia only dreamed of in its heyday. Flagship phones won't have dual-SIM slots, removable batteries, or MicroSD slots. Xiaomi has that part of the market covered, particularly in China. Xiaomi will struggle outside of China until they decide to stop infringing on everyone else's IP, but the signs are that they are going through the early stages of that phase now.

[RottenApple]

@Catriona:

What are people seeing in Apple?
All I see is an abusive corporate monster that's hell-bent on milking its loyal users dry.
But for others it's magic.

I hope that analogy helps a bit to realize what some people still see in Nokia.

[Tomi T Ahonen]

Hi Gang

haha yeah, I thought you all would show up to this blog entry, and I must confess this made me far more happy than I expected while I had obviously been seeing this as a highly likely scenario all along.

Jerry - I am 95% certain I will be buying the first re-birth Nokia on Android.

zlutor - no, Here is dead, the sooner they get rid of it (before everybody figures out how impossible its to make any money on location) the better for Nokia. I've held this position as some of our readers know since my second book M-Profits in 2002 (where i famously changed my mind, compared to my first book where I still fervently believed in naviation, maps, location etc).

E - good points BUT. Nokia was meticulous in documenting everything. A lot of that process is preserved in the institutional memory - incidentially a big leg up for anyone new who joins the organization - so re-assembling the system is not as difficult or time-consuming as it would be for a new entity like say Xiaomi. And for Nokia it would have far less of the problems of integration that Microsoft has been going through absorbing the Nokia unit. And furthermore its Finland, where are those talented people gonna go if not back to Nokia haha. No, it won't be immediate nor painless but for ANY company wanting to assemble - or re-assemble a handset design, manufacturing and sales organization, Nokia has it the easiest. Then think of context again, Lenovo and Xiaomi have shown that you can grow to 5% range of global market share over a 3 year period SIMPLY by succeeding in China. Nokia's brand and loyalty FAR exceeds that of Xiaomi or Lenovo in China. FAR exceeds. Thats before we consider India, Brazil, Nigeria, Egypt, Indonesia, Bangladesh, Vietnam, Philippines, on and on and on. Nobody had ever the 'starting point' where Nokia is today, on a mission to build/rebuild a handset empire.

But the first versions might not be 'bleeding edge' tech, thats true. They might be in the same class of say Galaxy S6, Xperia Z4, LG G4 etc, roughly in class of iPhone 6/6Plus. Not quite that 'moving the goal posts' that Nokia flagships almost always were. That is 'good enough' for the first edition, as long as its not 'worse' as a flagship than other Android top dogs, the Nokia loyal customers will be satisfied Nokia is back, as long as the phone is 'good enough'. They'd prefer it to be 'the best' but very soon Nokia's flagships will be, the very best again. And I would not be surprised if the very first phone is awarded phone of year. But it doesn't need to be quite that good right out of the box. Nokia won't give us a dog phone (at this time, haha) so we can be sure it stacks up VERY well against other top Android phones - it will run the same OS and Nokia will know very well the basic parameters of that OS generation it is designed for.

The mapping deal almost certainly includes a Nokia 'free forever' licence to whoever buys Here.

Catriona - haha bless you :-) So American of you, haha. Yeah. I truly accept you sincerely believe that what you wrote, and its an honest sentiment. Luckily Nokia no longer is run by a delusional madman who targed US needs ahead of Nokia major customer market needs. Catriona, come visit Nigeria, China, India, Brazil, Indonesia, South Africa, Malaysia, Thailand, Argentina - see the LOYALTY of the Nokia brand and the love of Nokia phones. Even as carriers tried to sabotage Lumia sales globally, the customers went out and bought millions of those 'Nokias' anyway. No, the Nokia brand is SECOND strongest brand globally in mobile if price is no object. When price is factored in, Nokia in phones is BY FAR the most powerful phone brand. Until Elop torpedoed the business in 2011, Interbrand ranked the Nokia brand 8th most valuable on the planet - Apple was ranked 17, Samsung 19 (and the king was of course Coca Cola).

Your view is a US-centric view, based on the bad Nokia image formed in the past 10 years, as Nokia feuded with US carriers who wanted to cripple Nokia premium phone features like WiFi, Bluetooth etc. Nokia refused, so the carriers stopped selling premium Nokia phones. The brand became known as a garbage brand of ultra-cheap 'burner' phones. That is ONLY TRUE in the USA. Go to Canada, Nokia is strong. Go to Mexico, Nokia is strong.

Now, to your points. 'Samsung stranglehold in top of market' - that on Android is WITHOUT Nokia competition. You know what happened when both were on the same platform? On Symbian, Nokia crushed Samsung. Same OS. On Windows Phone Nokia wiped the floor with Samsung. On the same platform. No, Nokia on the same platform on Android is Samsung's worst nightmare. Nokia will instantly take the top end - why - because Nokia has invested in consumer research to do the types of phones and tech that consumers want. Samsung hasn't. Samsung copies fast. The only reason Samsung got to the top is that Nokia abandoned that position and Samsung was the fastest to grab what was left to be taken. They didn't win by the best phones or best marketing or best distribution or best pricing. They won by being fastest. Now Nokia comes back and re-establishes its position. Samsung will get to keep the low end exactly as long as Nokia doesn't feel like fighting for it (first few years, when they are still building up to capacity). Finns are darn competitive too, but more than that, Nokia will want to prove to the world, they didn't lose, it was Elop who was wrong and Nokia will come back. I am pretty sure, after the early stages work out well, they decide to go for it and pursue number 1. Now, Samsung is ALSO fiercely competitive so that - THAT - will be a race. Apple will be toast on the sidelines if Samsung and Nokia really go at it. Apple simply doesn't have the ability to move as fast.

Nokia brand damaged goods. In the USA totally true. In Europe, a little bit yes, but that is FAR more assigned to Lumia and failed Windows smartphones than the Nokia brand itself. But that is trivial to the future as Nokia is THE strongest phone brand of the Emerging World. Nokia is the number 1 brand - not of phones - of ALL brands - in India for example, which will pass the USA as the world's second largest smartphone market next year. Like Rotten wrote, you Americans don't understand the power of the Nokia brand outside of the USA. But if you think Apple in America, that gets close to understanding Nokia in the Emerging World.

As to Here, its a dead dog of a business (yet another of Elop's mistakes to make it a major business unit). That Nokia wants 'desperately' to get rid of it, that is no sign Nokia HANDSET business would be in any trouble at all. What it signals is that Nokia current management has made sound judgements that Elop failed to do. Good riddance of the Here unit and mark my words, it will go to a (clueless) American company buying it, thinking there is value in Here. There isn't.

Now 'jumping into the Top 5' or 'passing Samsung or Apple' - I didn't say that would happen. I said 1% passing Blackberry in first 12 months, passing Lumia non-Nokia Microsoft in the second 12 months and entering Top 10 - not Top 5 - in the third year. Now, will Nokia go for number 1, yeah, I think I understand my Finnish 'sisu' guts, and feeling of outrage and betrayal and revenge and fight-back yeah, they will go for it. What is the smartphone world like in 2019 or 2020 when that fight gets real and Nokia takes say the number 3 position. Who knows. Lets see a formal announcement about the intention to come back later this year, and then the first announcements of the first phone(s) likely in the Spring of 2016, but at this point, the ride to a Top 10 slot and say 4% market share after 36 months on the come-back journey, that I can promise will happen.

Finally on Steve Jobs - I dont' get the connection as Apple doesn't have him anymore, so whats the point, and 'building a better phone' was always irrelevant. This industry is not like TVs, or PCs, or cars or cameras. The mobile phone handset business differs from all other consumer electronics in that the CARRIERS rule. And the best friend among handset maker always was (until Elop) - and from 2016 again will be.. Nokia.

Tomi Ahonen :-)

[Tomi T Ahonen]

Antonio

haha thanks. I have tried to map out some scenarios back in the early days of the Elop fiasco. There were strong consensus views of how Nokia under the previous strategy was going to perform out of year 2010 into 2011, 2012, 2013. Based on those industry analyst official public views, total consensus was - remember Nokia towered over the rivals in the smartphone industry, selling more than twice as many smartphones as number 2 - not Apple or Samsung - that was Blackberry - And Nokia was safely growing faster than Blackberry, Apple or Samsung from 2009 to 2010. And Nokia was growing profits (and its average sales price was INCREASING which meant the customers were loving the new products, the gains were not done with price-cuts and slashing profits).

Nokia invented the smartphone so its first market share was 100% naturally. And as more competitors came in, that would decline under any circumstances, anyway. The historical rate of market share erosion for Nokia smartphones unit (not Symbian, Symbian losses were caused by other things like partners being bought out and switching to Android). Nokia 'natural' market share erosion was about 5 points of market share per year. If we take that trend line, from 2010 with 29% then Nokia should be at 9% today. That would be the third largest smartphone maker and Nokia had never produced a loss in the smartphone unit (until Elop) its safe to say, that as Nokia was the only full-portfolio handset maker to go through the Great Recession wihtout one quarter of a loss - it would be thriving in the past years as the world emerged from the biggest planetary economic crisis any of us has lived through. If you take 9% smartphone market share in 2014 thats 112 million smartphones and at a 150 dollar ASP thats 17 Billion dollars of annual revenues.

Thats one way to look at it. Another way is that Nokia's smartphone market share was always stronger than its dumbphone market share (the only full-portfolio 'legacy' handset maker that managed this trick). The 2014 total handset market share for Nokia-Microsoft dumbphones was 25%. If we give say 2 points of market share above that, Nokia would have 27% in smartphones in 2014, and would sit in first place. Now the business would be generating 51 Billion dollars annually.

A third way to look at it is unit sales. Nokia unit sales grew continuously in smartphones but grew at a slower rate than the industry overall. So if we say Nokia would grow at half the rate of the industry, we get the 2010 unit sales level of 103.6 (final corrected Nokia number) growing to 214 by 2014. Thats a 16% market share and Nokia would be a bit ahead of Apple at number 2. This scenario gives total revenues annually last year by the smartphone unit of 32 Billion dollars.

That gives realistic levels of what should have/could have happened - on a linear projection of the Symbian based smartphone business WITHOUT the gains from the MeeGo OS and the best-ever product reception Nokia received for the N9 and the unprecedented demand for the N950 that Elop refused to even sell. The MeeGo strategy would definitely have done better than a pure Symbian strategy. And thats before we consider Meltemi, the Nokia low-cost OS also on Linux (like Android, MeeGo etc) which also was supported by Nokia's developer tool environment, called Qt.

The certain fact is that Samsung would not have become the biggest smartphone maker, because its sudden surge 2011-2013 was only because it pounced upon the void left by the absence of Nokia. Would Apple have grown unit sales yes, would Apple still have lost market share, of course. Would Android have grown past Symbian yes. Would Samsung have become the biggest Android maker ahead of HTC, also yes. Now the single biggest question mark is MeeGo (and its low-cost sister OS, Meltemi). Nokia had lots of partners lined up for MeeGo. It could have/should have become the legitimate 'third ecosystem' as all of Nokia smartphones, and much of some other brands too, would have run on MeeGo. By now, that would have then grown past iOS to take second place. Would it/could it have challenge Android would not have depended on Nokia but how its partners would have supported the OS platform. Japan and China would have been mostly MeeGo because of Nokia's close relationships with their carrier community and especially their biggest operators, NTT DoCoMo in Japan (also a Symbian partner) and China Mobile obviously in China. That would give Nokia a massive 'platform' upon which to build.

What is safe to say, Nokia would be absolutely a Top 3 smartphone maker and highly profitable. Its very likely Nokia would still be the biggest but Apple would make the biggest profits. The Nokia CEO would be eternally in the shadow of Apple and would have to learn how to deflect the US based critics who complain that Nokia was not winning in the US market and Nokia didn't make big 'enough' profits (compared to Apple). And MeeGo would be the second largest OS behind Android but ahead of iOS. And as Meletemi came on line in 2013, by now all of Nokia's last dumbphones too would have been migrated to that platform.

How's that for a quick response haha..

Tomi Ahonen :-)

[Catriona]

But I think you see the world through Android-tinted glasses. In Apple I see a company that's carefully cultivated a brand image and built an ecosystem from the ground up over many years. Nokia is a company that sold off what made it famous a year ago after spending 3 years in a failed experiment to remake itself. What's left of it is primarily an infrastructure company. Why would they would have any more success building up a viable handset company at this point than a startup?

[Tomi T Ahonen]

Rotten - thanks, good reply.

Crun - reasonable points yes, the industry is radically changed but you totally don't know the historical relevance and context. Its not 10 years since 'Nokia last participated'. Did you see the 2014 launch of the Apple iPhone 6 models? What was there? Large screens? Wow. Nokia STARTED that trend. What else was there? NFC. Yeah, Nokia did that 4 years earlier. What was the other thing by Apple? A mobile wallet? Nokia launched mobile payments 5 years prior. And your contention that a modern smartphone is a computer - you know who claimed that first - and was ridiculed by all PC makers including Apple at the time - that was Nokia.

To the argument of what makes a winnign phone today, I totally disagree that VR is or will be relevant. To gaming yes, to phones, not in many years, and possibly never. Haptic I/O perhaps. SDR software Defined Radio yes, most def and one of its big developers from the start was Nokia. Strong sensors, totally yes and again, Nokia staple. A loyal developer community no, that is part of the OS ecosystem not the phone brand. IF we sell Android phones, then ANDROID needs that, vs Windows vs iOS vs Blackberry etc. Not LG or Samsung or Sony or Huawei or Nokia - among Android handset makers.

Now to the facts. We saw in consumer surveys of what consumers actually want, last year. Battery, no surprise, again came on top. Apple gives us a closed-in non-replacable battery. That is what Samsung now for the first time does on the Galaxy. That was one of the things Elop brought to Nokia. But Nokia had usually great battery life - and user-replacable batteries. This hasn't changed. Camera. The second most used feature which is only growing in importance from selfies to 'sensors' measurements to scanning to video to Augmented Reality. The world leader in mobile phone cameras has been Nokia for more than a decade. This is still a major factor in consumers actually buying phones today, not some cool tech that some geeks like that MAY be relevant years from now. No, Nokia is not 'obsolete' (yet) even as this indsutry moves fast.

Maggan - fair point and I was tempted to entitle this blog story as 'Tomi Returns to his Nokia Fanboy Roots' haha.. Imagine being deprived iPhones by some idiot new Apple CEO for four years, and finally the next CEO comes in and says, you all want iPhones, we'll do them again... Thats kind of how I feel today. Nokia was always my fave phone (until Windows).

Tomi Ahonen :-)

[Stormwatch]

All I want is a smartphone that is as indestructible as good old 1100. Can I dream now?

[John Phamlore]

@Tomi,

More likely this is the equivalent of Lenovo buying out various PC and eventually server divisions from IBM.

I wish people like you who know things could clarify the points articles like this are trying to make:

http://www.gsmarena.com/its_official_nokia_to_make_an_android_phone_rd_moves_to_china-news-12034.php

"The President of Nokia China confirmed Nokia is working on Android powered smartphones, which will be probably manufactured in factories in Sichuan, China (after further assessment) and will be launched in 2016. He also sheds some light on company's future - the Nokia's R&D center will permanently relocate to Sichuan, China."

According to the site that broke the story:

http://recode.net/2015/04/20/nokia-plots-2016-return-to-phone-market/

"Even if the Nokia name comes back to the phone business, don’t expect Nokia to launch huge new manufacturing operations. It just sold those to Microsoft and isn’t eager to replicate them.

Instead, the N1 serves as a model of what the company hopes to do: Design cool products and then license the designs and Nokia brand to a company that will not only do the manufacturing, but also be responsible for sales and distribution."

Chengdu is a little bit more than a regional capitol city of Sichuan these days. It's one of China's equivalents to Chicago in the United States at the turn of the century.

I think what we are going to see if whatever Chinese company in Chengdu partners with Nokia will eventually buy out various assets. It is not an advantage for Nokia to no longer have factories manufacturing phones. Recall a Chinese company Geely Automobile purchased Volvo.

http://www.cnn.com/2015/04/20/asia/shanghai-auto-show-volvo/

What if Volvo had no car factories left and just had some speculative R&D products, and an announcement was made that production of new Volvos was going to restart in Chengdu? Then there would be no reason to think that the European Volvo factories would be revived from scratch.

This is more a story of China obtaining yet more Western IP because their government has pursued an industrial policy and a buildout of infrastructure to where China has a modern supply chain that cannot be matched anywhere else in the world.

[Curious Cyrik]

@Tomi:

I too think it is a good thing that Nokia is returning to smartphones after the "dark ages" and that raises a question:

I own a Jolla phone right now and really like the Sailfish-OS but the hardware is mediocre at best.

How big are the chances that Nokia will cooperate with Jolla now? May we see a Nokia phone with decent hardware powered by Sailfish-OS in the near future?

What is your best guess?

[E.Casais]

Tomi,

After reading the references given by John Phamlore, I am confirmed in my impression that we should not expect too much from a "revival" of Nokia handsets.

1) It will be a Chinese affair, for production: "probably manufactured in factories in Sichuan, China"; and for design: "the Nokia's R&D center will permanently relocate to Sichuan, China."

In other words, the skill set in design and production accumulated over decades in Europe has been written off. "Where are those talented people gonna go if not back to Nokia", you ask. They will definitely not go back to Nokia, as it this would entail relocating en masse to Sichuan.

2) Design and manufacturing go hand in hand -- one cannot put out excellent complete system designs without being involved in manufacturing. I have seen the failures that separating (outsourcing) manufacturing from design causes (do not give me the example of Apple -- the low-key story with every single new product Apple comes up with is the horrible manufacturing yields, an issue that only its enormous margins can absorb).

Hence, the new "Nokia" devices will be actually largely designed by Chinese ODM. Nokia itself will only license the brand, individual technologies (radio and camera come to mind), and possibly specific software utilities. The Nokia R&D will be there to cooperate on integrating Nokia technologies within the designs of the Chinese ODM. Quality will therefore be in the hands of the Chinese firm in charge of production.

3) "Nokia is very smart at marketing, they will know to price the first flagship on a profit-skimming strategy when the demand is big". Perhaps, but according to rumours, the licensee will be "a company that will not only do the manufacturing, but also be responsible for sales and distribution."

So the competitive advantage of Nokia in marketing? Unused. Pricing to maximize buzz, image, profits? Not under the control of Nokia. The feedback from salespeople and customers? Going to the Chinese, not to Nokia.

In summary, those new Nokia devices will be "Nokia by Foxconn (or Compal, or...)" with possibly a bit of "Nokia inside". Nothing more. I do not expect them to be truly innovative -- at least the first series, although I am ready (and desultorily hoping) to be surprised.

And to be honest, when I see a product designed and manufactured in China, I expect to pay a Chinese price for it -- not a massive surcharge because there is a specific logo from Finland, France, Switzerland or the USA on it. At least Samsung handsets are designed and largely produced in South Korea.

[E.Casais]

@Catriona

You live in the USA, which is a very special, insular mobile market, where brands like Nokia or Sony(Ericsson) never achieved the prominence they had in the rest of the world.

The proportion of people who relied upon a Nokia handset during the past 20 years is astounding -- it is still one of the most used brand worldwide because of the installed based of feature phones. Even in my country, where penetration of smartphones is very high and the iPhone achieved an even greater market share than in the USA, operators and retailers continue to sell those Nokia feature phones. Hell, those iPhone and Galaxy users possibly have an older Nokia candy bars lying in a drawer.

So yes, Nokia is still a well-known brand. If you ask, the image will not be of cool, modern, hip, app-rich devices. Rather, Nokia will bring impressions or memories of handsets that are cheap, easy to use, indestructible and with a long-lasting battery. This image explains a large part of the success of the Lumia 520.

Yes, there was a time where loyalty and fanaticism for Nokia devices reached peaks comparable to those for Apple. Upon introduction of the 8810 for instance, demand was so overwhelming that there were long waiting lists in basically every retailer of the countries where it was launched.

But you are right that the image of Nokia in mobile phones is visibly fading. I am not sure that attempting to revive it with a premium product would work, as it would clash with the long-lasting impression the brand left of affordable, durable devices with long operating times.