HMD Global, the company that has owned the launch rights for Nokia-branded cell phones since the end of 2016, recorded its first quarter at a profit since the beginning of the partnership. According to the GSM Arena website, the information appears in a report by FIH Mobile, one of the manufacturers responsible for producing mobile devices for the brand.
According to the report, a number of reasons contributed to this historic result. To begin with, HMD Global now focuses on selected markets for devices – a strategy that will soon include Brazil.
In addition, it now adopts a strategy called “multi-ODM”, which means hiring several different companies to manufacture the devices instead of concentrating the stock on one partner. The strategy allows the production of cheaper devices and sold at the same price as before, which in fact increases the profit margin. This relieves the accounts of both the company and FIH Mobile itself, which owns 10% of the company and one of the main suppliers of assembled components and models.
Worse than it looks
But just getting out of the red in a quarter is far from the solution to HMD Global’s problems. Apparently, the cellphone division under the Nokia name faces problems in terms of sales volume – and it marketed only 3 million devices in the final months of 2019, a figure considered quite low.
In addition, Finnish Nokia itself faces problems in its most powerful division, the telecommunications infrastructure division – and had to apply for a generous loan to continue offering 5G solutions. News of a possible sale of the former giant circulated in February this year, but negotiations do not appear to have progressed.