Nokia say it is not making, Selling phones again

Is Nokia returning to the phone-making business?

Apparently not as the longtime cell phone manufacturer officially denied rumors that it is planning a return to manufacture or sell consumer handsets. The denial came in a statement posted on the company's Web site over the weekend.

Nokia was once a significant presence in the mobile phone market, but it has been forbidden from making them until 2016 as part of its deal to sell the company to Microsoft for $7 billion last year.

Terse Statement

The talk of Nokia returning to phone manufacturing started with a Re/Code report claiming the company would return to the market in 2016 via its Nokia Technologies division, which made the N1 tablet released last year. Following the Re/Code story, media reports from China said that Nokia would start producing Android-based smartphones from a new research and development center in that country. It was that second round of reports in the Chinese media that Nokia referred to in its denial statement.

"Nokia notes recent news reports claiming the company communicated an intention to manufacture consumer handsets out of a R&D facility in China. These reports are false, and include comments incorrectly attributed to a Nokia Networks executive," according to the unsigned statement. "Nokia reiterates it currently has no plans to manufacture or sell consumer handsets."

While the company denied it was currently planning any manufacturing, Nokia is still putting out Nokia-branded devices into the market, most notably with the launch of a brand-licensed tablet computer in China, which runs on Google's Android platform. That seems to indicate that Nokia would look to have third parties actually build the phones under the Nokia name, rather than making the actual phones.

We reached out to Jan Dawson, chief analyst for Jackdaw Research, who told us that by the time Nokia is in a position to make phones again, it might not matter much.

"To be honest, by the time 2016 rolls around, it will be so long since Nokia was a major name in phones that I suspect it won't make much difference what the company does," said Dawson. "I don't expect them to sell many phones, whether it makes them itself or has them made by third parties."

Licensing Pending

Nokia’s denial never addressed smartphone design licensing, an area the company might still have a hand in going forward. That's because the company still sees value in designing and licensing handsets, according to a public presentation given late last year by Nokia Technologies president Ramzi Haidamus.

Microsoft’s purchase of Nokia does not seem to have been a great success. Microsoft sits in third place with just a 3.4 percent market share, behind Google Android smartphones and the Apple iPhone, according to a recent report from IT analytics firm comScore. Dawson noted that the various reports and denials could muddy the waters in terms of branding. "Microsoft retained the Nokia name for smartphones for several months, and still uses it on feature phones," he said.