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Nokia will be the mobile comeback kid in 2016 – wishful-thinking sources

'Lots of great stuff' in the pipeline, allegedly

Nokia is gearing up for a bombastic return to the smartphone world in 2016, according to new whispers.

The Finnish firm's Nokia Technologies division has been quietly hiring staff, and already has products under development, with an eye to reenter the market next year, we're told.

The second half of 2016, not coincidentally, is when Nokia will no longer be bound by the terms of the agreement it signed with Microsoft when the latter bought its devices and services business in 2014.

Under that agreement, Nokia was barred from selling "smart devices" until the end of 2015, and it couldn't license the brand to another manufacturer until the third quarter of 2016. Microsoft, meanwhile, was granted an exclusive license to label its mobes "Nokia" for the same period. But the software giant has already retired the brand from its smartphone line, preferring the "Microsoft Lumia" nomenclature.

Even after its smartphone branding license expires, Microsoft will still be able to market dumbphones based on the System 40 and System 60 operating systems under the Nokia brand for at least another eight years. But that license isn't exclusive; it doesn't stop Nokia from using the brand on its own devices.

The question is, is this really a business that Nokia wants to be in? It didn't work out so well last time around.

Freed from the burden of its ailing phone business, Nokia has returned to profitability and has shown strong growth in recent quarters. That success has been driven by the momentum of its Nokia Networks business, which reported €3.4bn ($3.65bn) in net sales in its most recent quarter alone. Now Nokia is looking to expand that business even further by snapping up Alcatel-Lucent.

The Nokia Technologies business segment, meanwhile, isn't much more than a footnote to the firm's balance sheet. The group brought in €149m in sales in the fourth quarter of 2014, or 4 per cent of the total. Its only notable product in the past year was the N1 fondleslab with its quirky "Z Launcher" software, which is being marketed in China but hasn't exactly knocked the iPad off its pedestal.

Getting back into the mobile device market in a serious way will require a significant marketing push, especially given that the only new Nokia devices to emerge in recent years have been Windows Phone devices sold by Microsoft.

Still, rumors of Nokia's return to the device business – as reported today by tech blog Re/code – lack any specifics, although one cited (or should that be excited) source said there is "a lot of great stuff in development." ®

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