Nokia Corp.'s Return to Mobile Is Spot-On

It's been a busy 2016 for Nokia (NYSE:NOK) with the assimilation of its former rival Alcatel-Lucent and an Internet of Things (IoT) deal with one of Russia's leading telecoms, to name but a couple of recent events. But the news that really caught investors' attention was Nokia's decision to reenter the world of mobile devices.

In the second quarter of 2010, Nokia was on top of the global mobile-phone sales heap, well ahead of "upstarts" including the iEverything maker and every other manufacturer. But as consumers ditched their old-school mobile phones for smartphones, Nokia took a beating which resulted in the now infamous $7.9 billion sale of its phone business to strategic partnerMicrosoft (NASDAQ:MSFT).

The deal with Microsoft was the end of the Nokia phone story, until CEO Rajeev Suri's announcement that it's back in the mobile mix, albeit in a different -- and better -- way than before.

The deal

Nokia's latest foray into mobile devices began with the recent formation of Finland-based HMD Global, which has been granted an "exclusive global license to create Nokia-branded mobile phones and tablets for the next ten years." In return for the use of the Nokia brand and intellectual property from its industry-leading patent portfolio, HMD will make royalty payments for each device sold.

Microsoft once again enters the Nokia mobile picture. Microsoft has agreed to sell what remains of its feature-phone unit to FIH Mobile, a subsidiary of Foxconn(NASDAQOTH:FXCOF), for $350 million. In return, Foxconn acquires Microsoft's manufacturing, some design rights, and the software king's extensive distribution and sales networks.