Just half a year after selling off its phone business to Microsoft, telecoms equipment maker Nokia is considering ways to revive its brand name in consumer markets.
"I think you can expect our brand will return to the consumer world," Nokia CEO Rajeev Suri said on Friday when asked about rumours that the networks equipment maker might re-enter the handset market.
After buying Nokia’s phone business last spring, Microsoft this week dropped the Nokia name on its latest Lumia smartphone.
Speaking at a capital markets day in London, Suri told investors that Nokia may license the brand name to other firms but will not resume making phones itself.
"We see brand licensing as an opportunity ... But I would say it is more of a long-term opportunity," Suri said of potential deals where other makers of consumer electronics might pay Nokia to use its brand on their products. "This is not a sentimentality thing," he added.
Nokia’s brand ranking was number five worldwide in 2007, but has since plunged to the bottom of the top 100, says market researcher Interbrand. Nokia does, however, remain the third-biggest player in the network equipment market.
Stock tumbles despite bullish outlook
The telecom gear maker’s share price fell by 5.5 percent on Friday, with traders citing disappointment over the group's updated profit margin targets. It raised its long-term profitability target based on strong demand for 4G networks this year, and said it expects the business to grow next year. It now aims for an operating margin of 8-11 percent, compared to its previous target of 5-10 percent.
"Expectations for 2015 have been on the upper end of that range, so perhaps that guidance was a slight disappointment for the market," said Inderes analyst Mikael Rautanen. "But it is good to remember that Nokia has been very conservative with its outlook lately."
“Nokia is being too modest on their margin guidance,” said Hannu Rauhala, an analyst at Pohjola Bank in Helsinki. “I was expecting 11 to 12 percent next year.”
Nokia also predicts that its Here navigation unit will expand next year with an operating margin of 5-10 percent.