Less than two weeks ago, Nokia announced the N1, the first Nokia-branded Android tablet. The N1 was designed by Nokia but is being pushed to the market through a brand-licensing agreement with an original equipment manufacturer (OEM) partner, Foxconn, who shall be responsible for manufacturing, distribution and sales. In other words, Nokia designed both the hardware and Z Launcher software layer and are licensing these and their brand name on a running royalty basis to Foxconn.
Going forward, Nokia’s plan for smartphones and tablets appears to be based on this model of licensing to OEMs. This approach makes sense, and here is why:
- Nokia sold off its factories to Microsoft earlier
- Nokia also sold off its distribution and sales channels to Microsoft
- Building new manufacturing plants and distribution channels would blow up Nokia’s overheads
- Licensing to manufacturing, distribution, and sales to OEMs leaves Nokia nimble and light-footed, able to concentrate on innovation and design
The new Nokia is a lean machine and can move faster in the marketplace than the old giant that it used to be.
Speaking of the new Nokia, I am reading that the recently announced Nokia N1 tablet runs stock Android 5.0 Lollipop. I take it that means it has Google apps, not Microsoft alternatives. If this is so, it makes sense. Nokia is under no obligations to Microsoft any longer with respect to bundling their apps and services. Any such obligations would make the acquisition a very dubious affair.