Despite the Microsoft takeover, what's left of Nokia can still make mobile phones - and soon

Summary:The Nokia brand looks to have been relegated to feature phones under Microsoft, but Nokia can still re-enter the device market in the not too distant future.

With Nokia's manufacturing, supply chain and 32,000 staff — once dedicated to making and selling Nokia phones — now being sold to Microsoft , you'd be forgiven for thinking that Nokia's dreams of returning to mobile glory are all but over.

As part of the acquisition , which saw Microsoft agree to buy Nokia's devices and services buiness for €5.4bn , Microsoft gets rights to use Nokia's name in connection with feature phones for 10 years. However, the period which Nokia has to wait before licensing the name to someone else, or making phones using the brand itself, is far shorter.

Under the terms of the deal, Nokia can't license the Nokia brand to anyone that might use it to sell mobile phones for a period of 30 months. And should Nokia wish to re-enter the devices market itself, it can use the Nokia name for its own kit from the start of calendar 2016. 

So in theory, in just over two years, Nokia could launch its own line of mobile devices again alongside Microsoft's own Nokia-branded feature phones . Six months after that, it could begin licensing its name to another manufacturer, meaning there could theoretically be three companies selling phones under the Nokia brand. 

But even without its own devices or brand on the market, Nokia still stands to gain significant revenues from the smartphone business through patents it has licensed, rather than sold, to Microsoft: €1.65bn of the €5.44bn purchase price gives Microsoft a 10-year non-exclusive licence to Nokia's smartphone patents — some of which it has been using in litigation against various Android smartphone makers — and reciprocal rights related to Here mapping services. Microsoft has an option to extend the licence too. 

Of course, with the Nokia handset stable under its belt, Microsoft will have the freedom to get rid of the brand entirely and rename the ranges in its own image if it so chooses.

However, Micrsoft's outgoing CEO Steve Ballmer claims naming will get simpler under its leadership: while the company could boost its own branding by slapping 'Windows Phone' in the middle of Nokia handset names, Ballmer said on Tuesday it has no such plans.

"I will say that I think we can probably do better for consumer name than the Nokia Lumia Windows Phone 1020. And yet, because of where both companies are and the independent nature of the businesses, we haven't been able to shorten that," he said.

"Just take that as a proxy for a range of improvements that we feel we can make. We can simplify the way in which we work with operators and the overall consumer branding and messaging gets much simpler. That is an efficiency of being one company."

Global coverage:  Nokia Interim CEO: Microsoft deal makes us stronger  |  Even with Nokia devices, Microsoft wants to license Windows Phone to other makers  |  Does its Nokia buy thwart or fuel a possible Microsoft break-up?  |  Microsoft shows how to flush decades of Nokia goodwill away  |  Microsoft gets less than $10 per Windows Phone unit  |  Microsoft-Nokia deal: Reaction from the Twitter trenches  |  Elop drops Nokia CEO role to lead devices team under Microsoft deal  |  Microsoft-Nokia deal: 11 quick facts  |  Microsoft to buy Nokia's devices, services unit for $7.2B

Topics: Mobility, Microsoft, Mobile OS, Nokia, Smartphones, Windows Phone

About

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, s... Full Bio

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