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Spotlight: Finnish media curious about future of new Nokia brand

Xinhua, May 20, 2016 Adjust font size:

As more details of the new life of Nokia as a mobile phone brand emerged, Finnish media on Thursday began to underline the key role of Taiwan-based Foxconn in the future of Nokia brand.

In the frame agreement unveiled on Wednesday, the newly founded Helsinki-based company HMD will mainly focus on "brand management" and designing, while Foxconn will be responsible for manufacture.

Media reports on Thursday mentioned marketing as a role of Foxconn as well.

Finnish business news service Taloussanomat reported that the locations for the production in Asia have not been chosen yet. As part of the deal between Foxconn and Microsoft, a production plant in Hanoi, Vietnam will switch to Foxconn. There are several production facilities in China as well.

Besides its head office in Helsinki, HMD will open offices in the UK, the United Arab Emirates and China, local media reported.

Speculation has continued about the background of HMD, but its representatives dismissed as false claims that Nokia or Foxconn is its owner.

Finnish media could not reach the key persons of HMD, Arto Nummela and Florian Seiche.

Brunswick, a company representing HMD said the two persons simply could not say anything as they are still employed by Microsoft. The press release on Wednesday said Nummela will be the CEO of HMD once the deal is completed.

Brunswick representatives were quoted by Taloussanomat as saying that Swiss-based Jean-Francois Baril had amassed investors for Smart Connect LP investment company, which has been associated with HMD. But Brunswick said they did not have any names.

Finnish media reported on Wednesday that HMD would have resources at its disposal, including 400 million euros (about 448 million U.S. dollars) to be invested in marketing plans.

A senior Nokia analyst, Hannu Rauhala of the OP Group, said the ownership structure would not be a problem to the Nokia brand.

He reminded that consumers in Asia do not care about the ownership, and in Asia it is common that companies have complex relationships in ownership.

However, Rauhala saw future production quality as a major threat.

"But Nokia has a board membership in HMD and is thus able to control it," Rauhala said.

Analyst Petri Sajari of the newspaper Helsingin Sanomat underlined the need of Foxconn to make low-priced mobiles a successful business.

Many manufacturers have avoided cheap phones for profit reasons. In terms of profits, a 150-dollar phone probably brings in what ten 15-dollar phones will, but for many would-be owners of a new Nokia phone, 15 dollars may be the absolute limit. So reaching high volumes is essential for Foxconn.

The newspaper headlined its comment "Poor people will be the buyers".

Sajari reminded that the reputation of Nokia is good in developing economies and people there are willing to consider buying another Nokia. Endit