Nokia Corporation’s Hardware Plans

Nokia Corporation’s Hardware Plans

Much of the latest news surrounding Nokia, the Finland-based company of late is either the sale of its HERE mapping unit to a consortium of German automakers for $3 billion or its progress in bringing to an end the $16.6 billion deal for Alcatel-Lucent – their European networking rival. These two events are significant and will transform the new Nokia for many years to come.

Nevertheless, HERE and Alcatel-Lucent sale were not the only recent news shared by Nokia in the recent tomes. The latest OZO virtual reality (VR) camera was unveiled in December 1 for pre-order, and it could be an amazing one and game changer. OZO is the idea of technologies unit of Nokia, where its vast patent portfolio as well as research and development are accommodated, and is a proof to the foresight of the division.

In addition, the division of Nokia technologies accommodates the folks proposing to enter the mobile-phone market again. The belief of a Nokia mobile phone doesn’t bring forth the same positive reaction, subsequent to the launching of the industry-changing OZO camera.

The Good of the Nokia Corporation Hardware Plans

With features such as the ability to view real-time VR production, full-blown 3D audio and visual capabilities as well as wireless functionality, OZO is an advanced device intended for professional creators. With the pending release of more than a few consumer VR devices that are expected to push the VR industry into hyper-growth mode, the timing of the launching of OZO couldn’t be better. At the same time, Nokia is taking into account a scaled-down consumer version that could fit the budding VR market.

Monetarily, the Nokia technology division made a meager $176.6 million of Nokia’s $3.3 billion in terms of revenue in the dawdling Q3 quarter, although that was a 7 percent enhancement weighed against what was obtainable one year ago.

Another good thing is that technology sales have jumped to $677 million for the first nine months of 2015. A large amount of that revenue was realized from Nokia’s patents and licensing fees, although latest devices like OZO could aid in diversifying things.

The Bad

Rumor revealed that Nokia is planning to bounce back into the handset market later in 2016. This was as a result of the non-compete clause endorsed by Nokia at the closure of the deal to sell its manufacturing unit to Microsoft.

However, Nokia wouldn’t produce the devices, unlike its mobile manufacturing past. As an alternative, the phones would be developed by its technologies unit and then license the manufacturing to sales partners, which will reduce the inherent risk.

The problem here is that, licensing the manufacturing compresses margins, thereby reducing profit potential, even with Nokia’s large mobile-patent portfolio. Another issue is that there are fast growing mobile phone manufacturers in Asia that will manufacture cheap phone for emerging markets on a very low budget, not to talk about those big boys of the Smartphone world. What will be the fate of Nokia in this situation?

OZO stands out from the crowd because it is a niche device in the fast-growing VR industry. With more companies entering the industry every day, the mobile-phone market is full of competition. To avert problems therefore, Nokia should maintain developing new, advanced products like OZO, which really have the likelihood of generating profitable sales, and disregard those mobile phone ambitions.

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