The Nokia Corporation (NYSE:NOK) has recently struck a record deal with Microsoft, handing over its smartphone business. The terms of the deal state that Microsoft is licensed to use the Nokia name for a period of 10 years and it can also use the brands Lumia and Asha. Post 2015 Nokia can use its own name on the mobile devices that it makes.
The Microsoft Corporation is free to use the Nokia name for as long as it wants. As part of a legacy deal the company will be selling Nokia phones. That said, the Nokia Corporation is still a strong one in the mobile business and despite all the pain and suffering it has got from being a part of the mobile market, chances are it will not move back into this market.
Nokia has many options but it is unsure what path the company will take. It could enter back into the mobile making market or it could just resell parts and third party products. Nokia can also sell its brand name to Microsoft but the best deal for the corporation is to license its products to a third party device maker.
In the next couple of years, Nokia is seeking an aggressive expansion of its businesses in China. Chinese companies Lenovo and Huawei which are two major players in the Andriod phone markets, these companies also feature high on the lists of buyers because of several reasons. The brand is a great option for companies looking to expand into US and worldwide markets. Nokia Corporation could make as much as $300 million from this deal and for a Chinese company it can easily be its entry point into the global markets. Premarket estimates on Monday said that the shares of Nokia fell slightly.
